On Wednesday 8 November, the Council of the European Union relayed the opinion of the European Central Bank (ECB) issued on 31 October on the European Commission’s proposal for a regulation for a digital euro. This proposal aims to provide a legal framework for a digital euro should the ECB Governing Council decide, following its preparation phase, to actually launch the digital euro.
A large part of the ECB’s vision of the digital euro had already been communicated, notably at the end of the investigation phase, a procedure separate from the European legislative process (see EUROPE 13274/29).
Overall, the ECB welcomes the European Commission’s proposal. It does, however, propose a number of amendments.
The ECB welcomes the proposal to provide the digital euro with legal tender status and thus make its acceptance compulsory.
The institution also welcomes the proposal to enshrine in European law that the basic principles associated with a potential digital euro should be free of charge. However, it recommends that the list of basic services be extended to include the ability to load and unload digital euro funds. The ECB is worried about negative consequences, particularly in terms of the attractiveness of the digital euro, if these services were to be charged by payment service providers.
With regard to technological neutrality, the ECB warns against the inclusion of provisions requiring or prohibiting specific designs or technical features for the digital euro, which could affect the smooth functioning, development or demand for the digital euro and the ECB’s ability to conduct an independent monetary policy.
On the subject of distribution, the ECB also welcomes the objective of providing appropriate economic incentives for private intermediaries distributing digital euros.
The ECB reiterates its stated intention to limit amounts held in euros. The Eurosystem emphasises that setting and calibrating individual holding limits results in a ceiling on the overall amount of digital euros that can be issued, and that this point falls within the powers conferred on the Eurosystem by the European Treaties. This amount naturally has an impact on the size of the Eurosystem’s balance sheet and the implementation of its monetary policy.
In addition, the ECB confirms that it will carry out an in-depth technical analysis of the interaction between multiple digital euro accounts and the management of an individual holding limit.
In terms of protecting privacy, the ECB welcomes the objective of ensuring a high level of privacy and data protection for users of the digital euro, both online and offline, while including provisions to minimise the risk of money laundering and terrorist financing.
In addition, the ECB welcomes the proposals for public assistance measures to support people who would find it less easy to access the digital euro.
Link to the opinion: https://aeur.eu/f/9ik (Original version in French by Émilie Vanderhulst)