Digital euro bill could be tabled in the EU early next yearVish Gainon February 14, 2022 at 08:13 Silicon RepublicSilicon Republic

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A bill to introduce a digital euro could hit tables at the European Parliament early next year, EU finance chief Mairead McGuinness announced last week.

First reported by Politico, the announcement was made by McGuinness at a fintech conference by Afore Consulting on Wednesday (9 February). “Our goal is to table legislation in early 2023,” she said. “A targeted legislative consultation in the coming weeks.”

This is the first time the EU has publicised a timeline for the introduction of a bill that will provide the legislative framework for the European Central Bank (ECB) technical and policy work around a potential digital version of the euro.

The “targeted legislative consultation” questionnaire set to be launched by the Commission next month 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 central bank had decided to “move up a gear” and commence an investigation phase to address key issues regarding 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.

The two-year investigation is set to end in 2023, by which time a prototype of the digital euro should be ready. If agreed upon by EU governors, the virtual currency could be ready for use by 2025 at the earliest.

Countries across the world are toying with the idea of a national digital currency to give citizens an alternative to owning and using virtual assets such as bitcoin. China, in particular, first started its digital currency project in 2014 while India expects to have a virtual version of the rupee by the end of this year.

While a digital euro could potentially be round the corner, no doubt helped by the enthusiasm of many EU 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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