Digital Euro: A Comprehensive Analysis of the European Central Bank’s New Currency
The Head of Financial Services in the European Union, Mairead McGuinness, emphasizes the need for a cautious approach to the legislation regarding the digital euro. In a recent press conference, she highlighted the importance of thorough analysis and careful consideration by the European Commission.
The digital euro is a new form of the European currency issued by the European Central Bank (ECB). These types of digital currencies are also known as central bank digital currencies (CBDC). According to Reuters, the introduction of the digital euro will likely be postponed until after the European Parliamentary elections in June 2024.
Digital Euro Should Be Usable Offline
This summer, the European Commission unveiled a new proposal for the digital euro. However, the final decision on the issuance of this European digital currency lies with the European Central Bank. The ECB is expected to decide in October whether to proceed with the development of the digital euro.
In the lead-up to elections, plans for new proposals usually come to a halt. After the European Parliament elections, a new EU executive directorate will be appointed. McGuinness does not want the digital euro to be rushed and launched before the elections.
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Europe Embraces the Crypto Concept of CBDC
Nevertheless, she is a proponent of the digital euro’s launch. In the press conference, McGuinness highlighted the decline in the use of cash in Europe.
“Cash is being used less. We use our cards and phones to make purchases, engage in e-commerce, and if there was ever a time when cash was diminishing a lot, what happens to government money – central bank government money – if it’s not in cash? We need a digital version of this.”
She argues that Europe needs a digital version of government money and that exploring this possibility should be taken seriously.
“If we didn’t have a digital form of government money in the future, that would create a black hole in our system.”
Fabio Panetta, a board member of the European Central Bank, echoed McGuinness’ viewpoint and stated that the ECB will present the results of its research on CBDCs next month. Panetta emphasized the need for inclusive legislation to protect citizens’ privacy when using CBDCs. Recently, Panetta expressed his expectation that the digital euro will bring significant changes.
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The introduction of the digital euro is a decision that requires careful analysis and consideration. The decline in the use of cash in Europe calls for a digital version of government money. The European Central Bank’s research findings on CBDCs will play a crucial role in shaping the future of the digital euro. As Europe embraces the concept of digital currencies, ensuring inclusive legislation and privacy protection will be vital for the successful implementation of the digital euro.