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EU Consultation Looks at Issues With a Digital Euro
The union's executive branch got the ball rolling Tuesday on the legislation needed to issue such a currency.
Updated May 11, 2023, 6:32 p.m. Published Apr 5, 2022, 1:03 p.m.
If the European Union issued a digital euro, it would need to establish laws in areas such as privacy and anti-money laundering, the European Commission, the EU's executive branch, said in a consultation published on Tuesday.
The call for ideas, which is seen as the first step toward legislation from Brussels on the topic, is being made even before any formal decision has been taken on whether to issue a digital currency in the first place.
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The consultation, which is open until June 14, asks questions about issues with a potential digital euro such as the ease of use, availability, fees, standards and caps on holdings needed to safeguard financial stability. The digital euro could be used by residents of the EU, tourists or trade partners, the consultation said. The document is the likely precursor to drafting laws that could come out early next year.
It sets out ideas on how the design of a digital euro could protect privacy and allow anonymity between transacting parties or their banks. Privacy emerged as the top issue in a European Central Bank consultation about a digital euro last year and remains a source of controversy.
Read more: Europe's CBDC Designers Wrestle With Privacy Issues
The ECB is looking at how a plan to issue a digital euro might work in a phase that will last until September 2023. An ECB presentation given to finance ministers on Monday set out ways to protect privacy, a topic that topped a previous survey of people’s concerns about the new technology.
In a statement on Tuesday, national ministers from within the bloc – keen not to be usurped by the ECB on matters of public policy – said that new laws would be needed to underpin the measure and said the digital currency shouldn't replace regular banknotes and coins.
Starting in June, EU finance ministers will discuss other knotty issues such as the impact on financial stability and the role of private banks and payment firms in distributing a digital euro.
UPDATE (April 6, 08:50 UTC): Amends closing date of consultation in third paragraph.
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