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The bill will provide a legislative framework to ongoing work by the European Central Bank on a digital version of the euro.
A bill to introduce a digital euro could be tabled in the EU early next year, European finance chief Mairead McGuinness said last week.
First reported by Politico, the announcement was made by McGuinness at a fintech conference run by Afore Consulting on Wednesday (9 February). “Our goal is to table legislation in early 2023,” she said, adding that a targeted legislative consultation would be held “in the coming weeks”.
This is the first time the EU has publicised a timeline for the introduction of this bill. It is expected to provide the legislative framework for the technical and policy work of the European Central Bank (ECB) around a potential digital version of the euro.
The targeted legislative consultation set to be launched by the Commission will reportedly focus on how a digital euro can be used, such as handling everyday payments.
McGuinness said that an impact assessment will follow the consultation to determine what kind of safeguards might be needed to prevent the initiative from destabilising the financial system.
In July last year, ECB president Christine Lagarde said the bank had decided to “move up a gear” and commence an investigation phase to address key issues regarding the design and distribution of a digital euro.
“Our work aims to ensure that in the digital age citizens and firms continue to have access to the safest form of money, central bank money,” she said at the time, adding that a digital euro must be able to avoid any undesirable impact on financial stability and monetary policy.
A two-year investigation by the ECB is set to end in 2023, by which time a prototype of the digital euro should be ready. If agreed upon by EU lawmakers, the virtual currency could be ready for use by 2025 at the earliest.
On its website, the ECB describes the digital euro as “like banknotes, but digital”. It would be an electronic form of money issued by the ECB and national central banks, designed to be accessible to all and to complement cash rather than replace it.
While a digital euro could potentially be around the corner, helped by the enthusiasm of European legislators such as Eurogroup president Paschal Donohoe and German chancellor Olaf Scholz, a digital US dollar could still be several years away.
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