European legislators to deliberate on Digital Euro in May 2023

The European Commission is set to revive deliberations as regards ratifying a bill that supports the establishment of the digital euro by the end of May 2023.

In the document released by EC on the European Union’s official account, it was described as a “tentative agenda for the forthcoming Commission meeting.” The Commission is set to converge on May 24, 2023, to deliberate heavily on enhancing the functionality of the euro in this regard.

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As reported by Mairead McGuinness, the European Union’s financial services commissioner, the forthcoming debate about the bill as regards the launch of the digital euro will act as a solid structure for innovation. There is a need for new laws that will guide the operation of the digital euro. These new laws will be extracted from the digital euro’s trajectory to be received as legal tender.

Other laws that will prevent anti-money laundering will be deliberated on and adequately approved. The financial services commissioner’s comments arrived during a recent announcement to the lawmakers on the Economic and Monetary Affairs Committee. The commissioner had this to say:

“It will be negligent if Europe did nothing now, but at some point, in five or 10 years, it will have to urgently rush through something.”

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What is the Digital Euro?

A digital euro would provide an electronic means of payment that anybody in the eurozone could make use of. This innovation will provide a secure and user-friendly means of processing payments just like cash does in the present world.

This will be widely different from “private money.” However, it is going to be possible to use a card or a phone app to deposit money and make payments with digital euros. It is going to serve as a complement to cash payments.

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As a digital alternative, it will make payment transfers in euros easy and faster. The European Commission is considering launching a central bank digital currency in Europe to combat the skyrocketing demand for secure and trustworthy electronic payments. Creating a digital means of payment provided by the central bank would offer a foothold of stability for the payment and monetary systems. In addition, it is going to improve the monetary hegemony of the euro area and spur competitiveness and efficacy in the European payment sector. The successful integration of the digital euro would signal a drastic change in cross-border payments, influencing international money transfers in diverse ways—making them fast, less expensive, trackable, and transparent.

Legislators Comment on the bill

European legislators have different opinions as regards the progress recorded towards the launch of the digital euro. Ambcrypto reported that Markus Ferber, a German politician and a member of the European Parliament, was cynical about the assumed usefulness that the currency would bring when compared side by side with other contemporary means of payment. 

Fabio Panetta, a member of the European Central Bank’s executive board, shared the concerns of the European lawmakers. While addressing the Economic and Monetary Affairs Committee, Panetta stated that CBDCs wouldn’t allow restrictions on how funds are spent. He stated: “The digital euro would never be programmable money… “Central banks issue money, not vouchers.”

Nonetheless, he did confirm:

“Together with the European Commission, we are still analyzing a possible compensation model for the digital euro.” In parallel, we are reviewing all the design options to bring them together in a high-level design for the digital euro in the spring.