Cryptocurrencies are gaining more and more strength, and international organizations know it. For this reason, the EU evaluates in a commission the project of the digital euro , the future official cryptocurrency of the European Union. It will not only take into account the dangers, but also the innumerable advantages of minting a digital currency.
The Directorate General for Financial Stability, Financial Services and Capital Markets Union of the European Commission stated that the cryptocurrency project will be evaluated for its impact on commercial matters. Financial experts will discuss the possibilities of this, such as international payments and the stability that it prints. It will also examine how to solve some uncertainties of the digital euro, such as the hypothetical cases of money laundering and the financing of terrorism. The commission will accept answers and objections until June 14.
We just launched a consultation on the digital euro – a digitized form of central bank money available to all as a complement to cash.
What are your expectations for a #DigitalEuro ? #EUHaveYourSay by 14 June!
– European Commission 🇪🇺 (@EU_Commission) April 5, 2022
According to the European Commission, these are specifically the points consulted:
- User expectations about the digital euro.
- The role of the digital euro in the European digital economy.
- Combine the application of the digital euro while safeguarding the use of physical money.
- The impact of the digital euro on the financial sector and financial stability.
- The application of measures against money laundering.
- Data privacy and cryptocurrency protection.
- Digital payments with the digital euro.
Legislation for 2023
Mairead McGuiness, the EC’s finance chief, recently stated that it is the European Union’s intention that the draft legislation will be presented in 2023. If it satisfies Eurozone officials, it could be operational by 2025 .
“Our aim is to present the legislation in early 2023,” said the financial services commissioner. The main reason for the rapid adoption of cryptocurrencies is the rapid progress they enjoyed in 2021 against the hesitation of traditional currencies during the Ukraine conflict. “If we do not meet this demand, others will,” said Fabio Panetta, member of the Executive Committee of the ECB, referring to the minting of the cryptocurrency.
Outside the European Union, El Salvador has become a leader in currency projects. In September 2021, the Central American country presented a pharaonic project called ‘Bitcoin City’, financed with Bitcoin. On the other hand, Kenya, Thailand and mainly China have also shown their interest in cryptocurrencies.
What is it and what are the advantages of the digital euro?
As its name suggests, it is a digital currency regulated by the European Central Bank. It is not a currency other than physical euro coins and banknotes . It is a firm project in which relevant countries within the organization, such as France, have already submitted tests. On the other hand, Spain also experimented with the currency in mid-2021.
The digital euro would provide much more speed and security in payments. One of the main interests it arouses is its possibilities after catastrophes or armed conflicts, such as the Russian invasion of Ukraine. Although unlike traditional cryptocurrencies, such as Bitcoin, it will be subject to state supervision. It still remains to be seen what type of technology it will use, especially if it is blockchain.