The European Commission opens a new consultation on the digital euro

The European Commission is calling on financial services specialists to weigh in on the potential rollout of a digital euro. In a Tuesda...



The European Commission is calling on financial services specialists to weigh in on the potential rollout of a digital euro.

In a Tuesday communication, the European Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union noted it would prepare an assessment of the central bank’s digital currency based on the expected impact on financial service providers, retail users and chambers of commerce. The commission will consult with industry experts on issues relating to the digital euro, including international payments, privacy, impact on the financial sector and financial stability, use cases alongside cash payments and rules to combat money laundering and the financing of terrorism.

“For a digital euro to be used as a single currency, alongside euro banknotes and coins, a regulation by the co-legislator would be needed, on a proposal from the committee”, noted the consulting file. “Furthermore, additional legislative adjustments to the current EU legislative framework to accommodate the digital euro and possibly digital currencies issued by central banks of non-euro area member states may be required.”

The digital consultations on the euro will complement those conducted by the European Central Bank, which recently published the results of the focus groups commissioned in September 2021. Consumer and merchant feedback suggests that the potential rollout of a digital euro could benefit use cases both online and at physical points of sale. The European Commission will accept responses until 14 June.

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Mairead McGuinness, chief financial officer of the European Commission, said in February that digital euro legislation will be offered sometime in 2023. The European Central Bank has explored the development of a digital euro, as interest in central bank digital currencies appears to be growing globally. An ECB consultation from October 2020 to January 2021 found that a digital euro could help reduce interest rates, speed up transaction processes and reduce the use of cash.