The European Commission has announced that a digital euro bill will be proposed in 2023.
As first reported by Politico, EU Finance Director Mairead McGuinness formally announced the EU’s formal assessment of digital euro legislation at a fintech conference on Wednesday.
“Our goal is to introduce legislation in early 2023,” the Financial Services Commissioner said. “Legal advice is targeted in the coming weeks.”
The European Central Bank (ECB) is already experimenting with digital euro designs and systems, with a prototype expected sometime in late 2023. If a digital euro is implemented, it will require the seal of approval of eurozone governors. If they give the green light, a digital euro could be ready for release by 2025.
The digital euro is a central bank digital currency (CBDC), a financial instrument that is taken very seriously by central banks around the world. The growing interest in cryptocurrencies stems from the growing fears that national currencies will eventually be undermined by the growing popularity of cryptocurrencies.
“If we don’t meet this requirement, others will,” said ECB CEO Fabio Panetta in mid-November.
Last year, the European Central Bank conducted a study and published a report on digital currencies. It has been found that a digital euro can help lower interest rates, speed up transaction processes and reduce costs.
Despite the purported advantages, central banks face an uphill battle to win over the public. A study conducted by the British Economic Commission and the German Central Bank showed that the majority of respondents were against state-backed digital currencies, citing skepticism about the benefits and concerns of government oversight.
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However, the official interest in digital currencies for central banks around the world has waned, as the Central Bank of Kenya recently asked the public for help with digital shillings, and Thailand has already started rolling out regulations for central bank digital currencies for future retail sale. The Central Bank of the Bahamas was among the first to launch the central bank digital currency, the Sand Dollar, in October 2020.
However, China maintains the number one leadership in the cryptocurrency world. The country has bypassed the international community with steady and significant leaps forward in the area of central bank currencies.