EU Considering Digital Euro Legislation for 2023
Legislation outlining the framework for an EU CBDC is not expected until late next year.
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The European Commission is aiming to create a legal framework for issuing a digital euro.
Digital Euro May Get Green Light Next Year
The EU may get a digital euro one day, but it will not be this year.
The bill establishing the framework under which a digital euro would operate is not planned to be delivered in until late 2023, according to Mairead McGuinness, EU Commissioner for Financial Stability, Financial Services and the Capital Markets Union.
The legislation will be used by the European Central Bank as the legal foundation for establishing a central bank digital currency.
The legislative initiative will also include full EU-wide coverage of instant payments through Sepa Instant credit transfer early next year and will aim to address the fragmented market for cross-border real-time payments. It is also intended to spur open banking initiatives across the European Union.
Although there are not many details, EU finance chief Mairead McGuinness announced the Commission’s legislative plans at a fintech conference on Wednesday morning.
During the announcement McGuinness said, “Our goal is to table legislation in early 2023. A targeted legislative consultation in the coming weeks.”
The ECB is currently conducting internal trials of the digital euro and are planning to develop a prototype by the end of 2023. Policymakers have started to conduct these trials due to the growing popularity of cryptocurrencies and because of pressure from tech giants, who are developing new payment methods with digital assets.
ECB Executive Board member Fabio Panetta told Members of European Parliament in mid-November:
“If we don’t satisfy this demand, then others will do it. As co-legislators you will play a key role in any changes to the EU legislative framework that may be necessary to introduce a digital euro.”
Although policymakers within the Commission and across Europe are already onboard with the idea of a CBDC, it is the ECB’s Governing Council who will have the final say on whether a digital euro is needed.