The European Commission is now laying the necessary groundwork for the introduction of a digital euro. Notably, the commission has issued a call for ideas that would enable it to inform and teach lawmakers about the different legislative challenges that exist in the current digital world.
This move by the Commission comes just before a formal approval for the introduction of a bloc-wide central bank digital currency (CBDC) that is being passionately pursued by the European Central Bank (ECB).
In their official statement, the Commission stated:
“For a digital euro to be used as the single currency, concurrently with euro banknotes and coins, it would require a Regulation of the co-legislator, upon a proposal by the Commission, based on Article 133 TFUE. For the Regulation, an impact assessment will be prepared, which will be supported by consultations carried out by both the Commission and the ECB.”
Running simultaneously with the ECB’s continuing consultation assessing the practical fronts and possibilities of introducing a CBDC, the new information-gathering exercise will deal with the anticipated effects on critical sectors, chambers of commerce, users, and other stakeholders in the world of international trade.
With a possible impact on the European Union privacy laws and anti-money laundering rules, the EU lawmakers will be looking at these issues carefully:
- The digital Euro’s (CBDC) role in the European Union’s retail payments and the digital economy
- International payments with a digital euro
- Users’ requirements and expectations for a digital euro
- The data protection and privacy aspects
- The digital euro’s effect on the financial industry and financial stability
- Making this digital stablecoin available for retail use while continuing to safeguard the legal tender status that is currently held by the euro cash
- Application of anti-money laundering and counter-terrorist financing (AML-CFT) rules and regulations.
