In 2023, the European Commission will propose a digital euro bill. According to Politico, EU finance chief Mairead McGuinness revealed the formal study of digital euro legislation at a fintech conference on Wednesday.
“Our goal is to table legislation in early 2023… A targeted legislative consultation in the coming weeks.”
-Commissioner for Financial Service
The European Central Bank working on a digital euro
The European Central Bank (ECB) is already working on a digital euro design and systems, with a prototype expected by the end of 2023. The seal of approval of Eurozone executives will be needed if a digital euro is to be implemented. If they agree, the digital euro may be available for circulation by 2025.
A central bank digital currency (CBDC) is a financial instrument that central banks throughout the world are looking at very seriously. Increasing worries about domestic currencies being undermined by the growing usage of cryptocurrencies have prompted an interest in CBDCs.
“If we don’t satisfy this demand, then others will do it.”
-ECB Executive Board member Fabio Panetta,
The European Central Bank has studied digital currencies and released a paper on the subject. It discovered that a digital euro may assist to lower interest rates, speed up transaction processes, and decrease cash usage.
CBDCs around the world
Central bankers are up against the impossible task of converting the public to their point of view. According to a report by the UK economic affairs committee and Germany’s central bank, most respondents opposed government-backed digital currencies because they doubted their effectiveness and worried about government surveillance.
With the number of cryptocurrencies greater than ever, government interest in CBDCs all over the world has picked up. Kenya’s central bank just announced plans for a digital shilling, and Thailand is already putting rules in place for a retail CBDC. The Sand Dollar, one of the Bahamas’ first CBDCs, went live in October 2020.
China, on the other hand, has maintained a first-mover edge in the realm of digital currency. The country has outpaced the rest of the world with continuing and substantial progress in the CBDC field.
A central bank digital currency is a digital currency created and managed by a central bank rather than by a commercial bank.
