ECB chief promises swift digital euro legislation

The European Commission will soon present a legislative proposal for the digital euro. Christine Lagarde, head of the ECB, told The Block.

In July 2021 the CBDC research phase began, which was set to run until September 2023. It was anticipated that by this time the regulator would determine the advisability of issuing the digital euro.

ECB Executive Board member Fabio Panetta reminded about possible limits on CBDC transactions and the amount of deposits for individuals. Earlier, the official said about €1000 (monthly) and €3000 respectively. The exact parameters will still need to be agreed, he noted.

Panetta explained that the limits were necessary to reduce risks to financial stability, and that the CBDC is not a replacement for cash. In a crisis, euro-area citizens could convert bank deposits into the national digital currency, he added.

“CBDC would be an additional option for retail payments, not a challenge to the functioning of the financial system,” Panetta said.

As noted previously, the initiative to issue a digital euro emerged in in November 2019. In October 2020 the ECB published a comprehensive report on this topic.

In May 2022, Panetta signalled that the CBDC could be issued by 2026, with an issuance cap of €1.5 trillion.

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