European finance ministers have called for the digital euro to deliver fairness and transparency, as central banks begin testing the project this year.
The digital euro is leading the European Central Bank (ECB), with the idea first Launched in October 2020 and a more formal “realization” of the project rolled 2021.
Since then, the Eurogroup, made up of the finance ministers of EU countries that use the single currency, has held regular discussions on the subject.
in statment After their last meeting, Eurogroup members set priorities for a central bank digital currency (CBDC), should the ECB decide to move forward with it. The actual issuance of the digital euro will depend on the outcome of the EU legislation.
Members noted how the CBD can enhance the autonomy of the cluster, as well as provide citizens and businesses with a range of benefits.
Most importantly, the ECB will continue to act as “the anchor of our monetary system,” the statement said.
The digital euro: balancing integrity
However, there is still a lot to be decided about what the digital euro will look like. Eurogroup’s recent statement highlighted an important tension between user privacy and crime-fighting measures.
“To be successful, the digital euro must guarantee and maintain user trust, where privacy is a key dimension and a fundamental right,” the statement said.
At the same time, Eurogroup also considered that the design of the digital euro should be consistent with other policy objectives such as preventing money laundering, illicit financing and tax evasion, and ensuring compliance with sanctions.
The group suggested that one solution is to give those making “less risky transactions” more privacy.
Another issue raised during recent discussions was the potential environmental impact of a digital euro, as well as the belief that it should not replace cash but should complement it.
The group also gave a glimpse of what features a digital euro could have to make it competitive with traditional online banking, saying it supports exploring an offline feature and programming payments that must be met when certain conditions are met.
what happened after that?
The European Commission intends to present a proposal in the first half of this year that would create a digital euro and regulate its main features.
Meanwhile, the European Central Bank is conducting an initial exercise on a digital euro. Five companies – CaixaBank, Worldline, EPI, Nexi and Amazon –has been selected To get involved in the exercise, each focus on a specific CBD use case.
The ECB’s investigation phase is due to end in the fall, after which a decision will be made on whether the project should be implemented.
At the same time, the European Central Bank issued a call to players in the industry Participate in market researchWith answers in mid-February.
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