Finance ministers from EU countries have reached a compromise on key aspects of the digital euro. The project is positioned as a strategic alternative to payment systems like Visa and Mastercard, reports Reuters.
According to the agency, finance ministers will have a say in the issuance of the CBDC and can set limits on account holdings. This measure aims to mitigate the risk of mass capital outflows from commercial banks.
“The digital euro is not just a means of payment, but a political statement about the EU’s sovereignty and its ability to process transfers using European infrastructure,” said ECB President Christine Lagarde.
Doubts and a Long Road to Launch
Despite the progress, the issuance of the CBDC could take years. The legislative framework is planned to be approved by June 2026, after which the ECB will need up to three years for technical implementation.
The project has influential opponents. MEP Fernando Navarrete Rojas called the digital euro “a solution to a problem no one asked for.”
He stated that it is necessary to carefully assess potential risks: destabilization of the financial system, data privacy issues, and additional costs for combating fraud and money laundering.
Challenges for the Single Market MiCA
While the future of the digital euro is being discussed, the implementation of MiCA is already facing challenges, noted in a Cointelegraph podcast. The main idea of the regulation is a “passporting” system, where a license obtained in one EU country is valid in all 27.
However, regulators in France, Italy, and Austria fear regulatory arbitrage. Companies may choose to register in countries with less stringent oversight, undermining the very concept of a single market.
“We have already seen retail trading platforms flock to Cyprus and Malta under the MiFID. Expectations with MiCA were different, but we are again seeing firms choose more ‘accommodating’ jurisdictions,” explained CoinShares’ Head of Compliance Jérôme Castille.
In his view, the problem is not the lack of rules, but their inconsistent application. Without clear instructions, national regulators act at their discretion.
Burden on Small Businesses
Marina Markezic, Executive Director of the European Crypto Initiative, noted that high compliance costs in a short timeframe could push startups out of the market.
“For the largest players, single access to the entire EU market is indeed a positive point. But for smaller companies, it’s a huge burden, and they may not survive the process,” she said.
The success of MiCA will depend on whether the EU can ensure consistent application of rules across all countries. According to Markezic, this is a real test for Europe, as the same law is overseen by 27 different national agencies with varying levels of experience and resources.
Back in August, sources from the Financial Times revealed that the ECB is considering launching the digital euro on Ethereum and Solana networks.