The Executive body of the European Union is set to begin consultation on its digital currency next month. The legislative arm will also prepare a new law to establish protocols for the Euro’s digital version. The proposed bill is expected to arrive in 2023.
The Officer in charge of finance for the European Union, Mairead McGuinness, announced the intention of the commission to enact laws for the digital Euro.
The Proposed Bill
As reported by Politico, the EC is working on a bill that will lay down protocols for its project, the digital Euro. The commission will be working together with the European Central Bank (ECB) to prepare the legal side of this euro project. The project entered the investigation stage in October last year.
The executive body plans to release a drafted law in the early part of 2023. Before then, it wants to carry out a public consultation on the matter to know the public’s thoughts and other stakeholders on the issue. The ECB did something similar in 2020 when it realized that Europeans were not at ease with their financial privacy. The European Commission will emphasize more practical questions like how the currency will cater for everyday payments and transactions.
McGuinness made this announcement at a financial tech conference. The institution’s goal is to have legislation by 2023 while it carries out some consultation on the matter in March.
Assessment Of The Bill
For the bill to become law, the EC must consult with legislatures and the states’ governments that make up the EU. This move ensures synchronization among them, and they all agree to the bill.
Presently, ECB tests are being carried out on the functionality of the currency. The European Central Bank plans to develop a prototype of the currency available in 2023 for the CBDC.
For the final part of the project, an assessment will be carried out to ascertain the impact on the financial system on the continent. The evaluation will determine if launching the dual currency will destabilize the financial system or not. It will also be noteworthy to decide if having a virtual currency is necessary and when it will probably be issued.
Leading members of the European Union such as Germany and France have asked the ECB to increase its effort towards creating a virtual currency. However, the final decision rests on the shoulders of the central bank’s governing council.
Policymakers in Eurozone capitals are afraid of lagging in developing a virtual currency as other nations such as Russia, China, and the U.S.A. are already moving in that direction. By March, the committee should have made progress on the matter.