European Commission, ECB Unite to Consider Potential Pitfalls of the Digital Euro

The European Commission and the European Central Bank (ECB) are teaming up to consider potential issues that could arise from the digital euro before a decision is made to kick off the digital currency's development this summer.

The two European Union institutions now plan to cooperate on "exploring the possibility of issuing a digital euro, as a complement to cash and payment solutions supplied by the private sector," according to a joint statement from the ECB and the European Commission on Tuesday.

The ECB is to decide whether to set the project in motion sometime in mid-2021, they said.

“Such a project would answer key design and technical questions and provide the ECB with the necessary tools to stand ready to issue a digital euro if such a decision is taken,” the joint statement reads.

As reported by EU policy-focused news service EURACTIV on Wednesday, the ECB closed the public consultation on its plans for the digital euro on Jan. 12, which found privacy was a primary concern among 41% of respondents.

Both institutions will consider the "policy, legal and technical questions emerging from a possible introduction of a digital euro," they said in the joint statement.

Read more: Lagarde Seeks Public Comments About a Digital Euro, Implying a Broad Retail Offering Is Now on the Table

EURACTIV said it "understands" employees from the European Commission including Financial Services, Economy, and Digital Affairs, will now be drawn into a new working group with the ECB for the collaboration.

ECB President Christine Lagarde said earlier this month she expects the digital euro to launch in no more than five years.