The European Commission is laying the groundwork for the introduction of a digital euro, issuing a 'call for ideas' that would help to inform rule makers about legislative challenges.
The move by the Commission comes ahead of a formal green light for the introduction of a bloc-wide central bank digital currency (CBDC), which is being enthusiastically pursued by the European Central Bank.
In a statement, the Commission says: "For a digital euro to be used as the single currency, concurrently with euro banknotes and coins, it would require a Regulation of the co-legislator, upon a proposal by the Commission, on the basis of Article 133 TFUE. For the Regulation, an impact assessment will be prepared, which will be supported by consultations carried out by both the Commission and the ECB."
Running concurrently with the ECB's ongoing consultation assessing the practialities of introducing a CBDC, the new information gathering exercise will deal with the expected impacts on key industries, users, chambers of commerce and other stakeholders in international trade.
With a likely impact to EU privacy laws and AML rules, the EU legislators will be looking at the following issues
- Users’ needs and expectations for a digital euro
- The digital euro’s role for the EU’s retail payments and the digital economy
- Making the digital euro available for retail use while continuing to safeguard the legal tender status of euro cash
- The digital euro’s impact on the financial sector and the financial stability
- Application of anti-money laundering and counter terrorist financing (AML-CFT) rules
- The privacy and data protection aspects
- International payments with a digital euro