European Commission Consults on Potential Digital Euro

The European Commission has launched a targeted consultation on a possible digital euro. The EU is considering introducing a digital euro for retail payments, which would be available alongside cash. A decision has not yet been made. The European Central Bank, responsible for the design and implementation of the digital euro, launched a project in July 2021 to get ready for the potential issuance of a digital euro. The introduction of a digital euro would require an EU regulation based on a proposal by the European Commission and agreed through the co-legislative process. Legislative changes would also be needed for existing legislation (e.g., under the revised Payment Services Directive). Central banks from non-euro area Member States also envisage issuing digital currencies.

The European Commission’s consultation covers:

• 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 financial stability.
• Application of AML/CFT rules.
• The privacy and data protection aspects.
• International payments with a digital euro.

Responses to the consultation may be submitted until June 14, 2022.

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