The European Commissioner for Financial Stability, Financial Services and Capital Markets Union, Mairead McGuinness, reported that the European Union is ready to formally move towards legislation for a digital euro by 2023.
McGuinness highlighted during an Afore Consulting fintech conference, that the European Commission plans to present a draft law where all associated aspects will be addressed, and said:
“Our aim is to present legislation in early 2023… [There will be] a specific legislative consultation in the coming weeks.”
The official highlighted the need to push this initiative forward because of the boom that cryptocurrencies have been gaining in recent years, which has prompted central banks around the world to develop digital versions of their respective currencies.
This bill is expected to serve as a legal basis for the technical work currently being carried out by the European Central Bank (ECB) for the digitization of the euro, which would make use of the benefits of Blockchain to take the local currency to the next technological level.
On the need for a digital euro, ECB board member Fabio Panetta said:
“If we don’t meet this demand, others will… As co-legislators, you will play a key role in any changes to the EU legislative framework that may be necessary to introduce a digital euro.”
The European Central Bank is already conducting internal experiments for the issuance of a digital euro, so it is contemplating starting work on a prototype in public by the end of 2023.
There the decision will be left to the governments of the Eurozone, which will decide whether it will be worthwhile to mint a cryptocurrency backed by the financial institution, and if they all agree, it is expected that by 2025 the states will already be making use of such a currency.
According to analysts, this legislative initiative would support the efforts promoted by the European Central Bank, which is already testing a digital euro and possibly by the end of 2023 will launch pilot programs in different regions to test its usefulness.