ECB Says It Supports Commission's Digital Euro Proposal

The European Central Bank has signaled it is ready to roll out a digital euro, but insists it must keep cash available.

The European Central Bank (ECB) today (June 28) expressed support for legislative proposals by the European Commission aimed at creating a regulatory framework for a digital euro. The legislation aims to ensure that a digital euro can be used as universally as traditional banknotes and tokens across the eurozone.

The ECB said it was awaiting a decision by its governing council this autumn on whether to proceed with the next phase of the digital euro project. The announcement follows the Commission’s publication of legislative proposals for a digital euro today.

As the digital euro achieves legal tender status, it is expected to gain widespread acceptance as an efficient payment method. The legislation also proposes that individuals can access the digital euro through banks upon request, thus ensuring that the digital euro is accessible to all.

In addition to providing free basic services for digital euro use, the legislative proposals include financial incentives for private intermediaries to distribute digital euros, which would help prevent merchants from charging exorbitant fees.

The proposal emphasizes privacy and data protection and aims to maintain high security standards while curbing money laundering and terrorist financing risks. The digital euro can also be used offline, offering a level of privacy similar to cash.

"The euro embodies European integration in its most concrete form," said ECB President Christine Lagarde. "We are eager to work with other EU institutions on a digital euro to ensure our currency remains relevant in the digital age." .”

The investigation phase of the digital euro project will end in October 2023, after which the ECB's Governing Council will decide on the next steps.

Fabio Panetta, member of the executive committee and chair of the high-level task force on a digital euro, applauded the legislative proposals to bring the value-added features of cash to the digital realm. The ECB also applauded the European Commission's proposal to protect the legal tender status of euro cash.

To keep cash an essential part of the payments system, the ECB supports the proposal, ensuring that euro notes and tokens remain easily accessible and widely accepted. The bank stands ready to provide technical support to EU coalition lawmakers and awaits a request for consultation on proposed legislative changes.