European Will Focus On CBDC Development If Approved In October

Key Points:

• European Committee will submit a legislative proposal in June that will provide a regulatory framework for the digital euro.
• In October, the decision-making committee will decide whether to start preparations for a digital euro.
• Phase, for development and testing this phase may last for two or three years.

According to Fabio Panetta, a member of the European Central Bank’s Executive Committee, the committee will submit a legislative proposal in June that will provide a regulatory framework for the digital euro (CBDC), and the decision-making committee will decide whether to begin preparations for a digital euro in October.

This project is being worked on by a team of around 50 individuals. The Governing Council will next decide whether to initiate a preparatory phase to create and test the digital euro in October. This stage may last two to three years. If the Governing Council and European lawmakers – Member States and Members of the European Parliament – reach an agreement, the digital euro might be launched in three or four years.

Panetta spoke on the necessity for CBDCs:

“To safeguard financial stability, we need to keep central bank money at the heart of the financial system. And we want to offer citizens a risk-free European digital means of payment that they can use free of charge anywhere in the euro area, in shops, online or for payments between individuals.”

He said that the digital euro would serve as a platform for European financial intermediaries to deliver new payment services throughout the eurozone. Services created in one European nation are often unavailable in others. Moreover, two non-European businesses dominate the European card payments industry, despite the fact that their cards are not accepted everywhere. This issue would be exacerbated by the expansion of huge digital companies that do not hesitate to profit from their consumers’ personal data.

Panetta also highlights the several advantages of using CBDCs, such as the ease of use of a payment instrument that is accessible across the eurozone and will increase the usage of the EU’s currency. Greater payment market competition and innovation based on the financial “raw material” that we will make accessible to European financial intermediaries. Also, more monetary sovereignty.

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Harold

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