The European Commission Vice-President, Valdis Dombrovskis, said, on Monday 7 November, that the EU institution is preparing a legislative proposal expected in the “first half of 2023” to provide a framework for the creation of a digital euro, a project on which the ECB is actively working with a view to it being put into place by 2026.
Mr Dombrovskis did not deny that the introduction of a digital euro would have implications for financial institutions, although the aim is not to erode the stock of bank deposits of individuals and ultimately limit the ability of banks to lend to the real economy.
Like him, the ECB President raised the issue of privacy, which is essential for citizens to have confidence in the central bank currency in a digital environment. According to her, a political decision will have to find “the right balance between conflicting objectives” such as the protection of personal data and the fight against money laundering and terrorist financing.
“Complete anonymity” does not seem to me to be a viable option for combating money laundering and, to protect bank deposits, it will be impossible to set a limit on investments in digital euros without having access to the identity of individuals, said Ms Lagarde, while envisaging maximum security for low-value and offline payments in digital euros.
Mr Dombrovskis and Ms Lagarde also stressed that, despite the rise of digital payments, the digital euro will not replace cash. Moreover, the Vice-President of the Commission has indicated in this respect that a specific legislative proposal will clarify the legal tender status of the euro, which is already enshrined in the Treaties (Article 128). For Ms Lagarde, this status should also be granted to the digital euro. (Original version in French by Mathieu Bion)