European Commission to draft legal framework for the digital euro

The European Commission is set to prepare the legislative provisions for the digital euro in June 2023, заявил Fabio Panetta, a member of the ЕЦБ Governing Council.

He noted that EU member states are in constant contact with the European Commission to work out the detailed framework of the rules.

“We are studying the design of the digital euro, its dissemination and its impact on the financial sector,” Panetta said.

The central bank’s spokesperson clarified that the final approval from the ECB’s Governing Council will be issued only in October. Then the regulator will begin preparing for the launch and the first stages of testing the technology.

He estimates that if authorities approve the proposal, the digital euro would launch in about three to four years.

He underscored the need for citizens to have risk-free digital payment instruments that can be freely used across the entire EU. Panetta added that such a solution does not currently exist, noting the dominance of non-European payment companies in the local market, notably Visa and Mastercard.

In response to questions about privacy, the regulator’s representative explained that the ECB would not have access to personal data. The distribution and organization of the digital euro would be handled by “financial intermediaries”.

The initiative to issue the digital euro emerged in November 2019. A year later the ECB published an all-encompassing report on the topic.

In July 2021, began the research phase into the digital euro, which is due to run until September 2023. It was anticipated that by this date the regulator would determine the viability of issuing a central bank digital currency (CBDC).

In May 2022, Panetta allowed for CBDC issuance by 2026, with an emission cap of 1.5 trillion.

In November, the regulator’s head Christine Lagarde said that the digital euro will eliminate the risks of losing financial sovereignty.

In April 2023, Panetta noted that the European Parliament could impede the issuance of a national digital currency.