The European Commission opens a new consultation on the digital euro

The European Commission is calling on financial services specialists to weigh in on the potential rollout of a digital euro.

In a notice published on Tuesday, the European Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union announced that it would prepare an assessment of the central bank’s digital currency based on the expected impact on financial service providers, retail users and chambers of commerce. . The commission will consult with industry experts on issues relating to the digital euro, including international payments, privacy, impact on the financial sector and financial stability, use cases alongside cash payments and rules to combat money laundering and the financing of terrorism.

“For a digital euro to be used as the single currency, alongside euro banknotes and coins, a regulation by the co-legislator would be required, on a proposal from the committee,” the consultation document states. “Furthermore, additional legislative adjustments to the current EU legislative framework to accommodate the digital euro and possibly digital currencies issued by central banks of non-euro area member states may be required.”

Consultations on the digital euro will complement those conducted by the European Central Bank, which recently released findings from focus groups commissioned in September 2021. Feedback from the general public and traders suggested that the potential rollout of a euro digital could benefit from use cases both online and in physical outlets. The European Commission will accept responses until 14 June.

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Mairead McGuinness, the European Commission’s finance chief, said in February that legislation on a digital euro would be proposed sometime in 2023. The European Central Bank has been exploring the development of a digital euro as interest in Central bank digital currencies appear to be growing globally. . An ECB consultation from October 2020 to January 2021 found that a digital euro could help lower interest rates, speed up transaction processes and reduce the use of cash.

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