Fabio Panetta, a member of the Executive Committee of the European Central Bank (ECB), shared news that the European Commission is preparing to introduce a law for the digital euro in June. Panetta also mentioned that further decisions regarding the digital euro’s progress will be made in October.
In an interview on the ECB’s official website, Panetta confirmed that the eurozone bank is working closely with the European Commission to create rules and guidelines for the digital euro. The digital euro aims to become the official digital currency issued by the central bank for the 27 countries in the European Union.
Panetta shared, “We are examining how the digital euro should be structured, how it should be distributed, and what effects it may have on the financial industry.” He also mentioned that the proposal, which is anticipated to be introduced in June, will be reviewed by the Governing Council of the ECB in October.
After reviewing the proposal, the Governing Council will make a decision regarding whether to proceed with a preparation phase for the development and testing of the digital euro. Panetta mentioned that this testing phase for the European Central Bank’s digital currency could last for a period of two to three years.
Also Read This Related: Digital Euro Expected to Become Reality in 3-4 Years
If everything goes well and both the Governing Council of the ECB and the legislators of the European Parliament give their approval, the digital euro could be introduced in about three to four years, according to Panetta’s estimation.
During the interview, Panetta was asked about the advantages and possible drawbacks of using the digital euro. He highlighted the importance of offering citizens a secure and reliable digital payment method that can be freely utilized across the euro area.
Panetta emphasized that a similar solution is currently unavailable, noting that non-European companies like Visa and Mastercard dominate the card payment market. He highlighted that this situation would be considered unacceptable in the United States and expressed worries about companies selling users’ personal information.
Panetta also stressed the significance of keeping central bank money as the foundation of the financial system. The growing popularity of cryptocurrencies such as Bitcoin (BTC) raises concerns for institutions like the ECB.
In response to privacy concerns, Panetta clarified that the ECB would not have access to personal data. The distribution of the digital euro would be handled by financial intermediaries. However, it is important to strike a balance between maintaining confidentiality and preventing money laundering and terrorist financing. Panetta stated that it is the responsibility of legislators to find this balance.
Digital currencies issued and regulated by central banks, known as Central Bank Digital Currencies (CBDCs), are gaining popularity globally. Several countries, such as the Bahamas and Nigeria, have already introduced their own digital currencies. Meanwhile, China and Japan are in advanced stages of testing their digital currencies through pilot programs.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
