The European Central Bank (ECB) launched a public consultation on Monday 12 October on the advisability of creating a digital or virtual euro that would have the same legal tender status as cash.
A digital ‘central bank’ currency would, in particular, allow users to have a digital wallet to make their daily payments and even to make deposits directly with the ECB.
“A digital euro (...) would also shield us from the risk that a private or public digital means of payment issued and controlled from outside the euro area could largely displace existing domestic means of payment. Such a development would raise regulatory and financial stability concerns and could even put Europe’s monetary and financial sovereignty at risk”, said Fabio Panetta, member of the ECB’s Executive Board, in a debate in the European Parliament on Monday 12 October.
Several Member States consider that the legislative framework, suggested by the European Commission to regulate asset-backed crypto-assets, such as Facebook’s Libra, does not go far enough (see EUROPE 12575/5).
Mr Panetta listed several legal, technical and economic challenges that will need to be addressed before deciding, in the summer of 2021, whether to launch a project that will take several years to complete.
Between 2016 and 2019, the proportion of cash payments in the physical retail trade decreased from 79% to 73% and the Covid-19 pandemic accelerated this trend.
The Eurogroup is expected to discuss the digital euro at its meeting on Tuesday 3 November.
Participate in the ECB consultation: https://bit.ly/2H8AlUX
See ECB report on the digital euro: https://bit.ly/3j2EneN (Original version in French by Mathieu Bion)