On Monday 14 July, representatives of the European Commission and the ECB’s Piero Cipollone, once again attempted to respond to MEPs’ concerns about the plan to create a digital euro to complement the single currency in cash form.
For Mr Cipollone, the introduction of a digital euro will even preserve the role of cash, the use of which has fallen between 2019 and 2024 from 68% to 40% in volume and from 40% to 24% in value. “The decline in the use of cash has not been to the benefit of European electronic payment service providers, but to the benefit of non-European providers”, he noted during a discussion with the European Parliament’s Committee on Economic and Monetary Affairs (ECON).
Asked by Fernando Navarrete (EPP, Spanish) whether a private offer for a digital euro was plausible in the medium term, the Commission’s Director-General, John Berrigan, said that the choice was not between a digital euro managed by the ECB or a private solution. “The digital euro will underpin innovative private payment solutions”, as they will use its infrastructure, he said.
Pierre Pimpie (PfE, French) questioned what the real cost of the project would be. There will be a cost for the central banks and another for the service providers, which is why we are working on a financial “clearing system” along the lines of what exists for current payment systems, said the European Commissioner for the Economy, Valdis Dombrovskis (see EUROPE 13676/22). Mr Cipollone quoted a range of between “€400 million and €1.4 billion”, borne entirely by the Eurosystem. Everything will depend on the legislation that is put in place, for example whether it will be possible to hold several digital euro wallets or whether offline payments will be authorised, he noted.
Stephen Nikola Bartulica (ECR, Romanian) described the digital euro as a potential tool for “social control”. As the future digital single currency cannot be programmed, “the ECB will not be able to block a portfolio”, retorted Mr Dombrovskis. However, apart from the offline version, the use of the digital euro will not be totally anonymous. While the ECB will not be able to identify who is making an online payment, there will be safeguards in place to combat money laundering if necessary.
Mr Cipollone also pointed out that payment in digital euros could be made “conditional”, citing the example of paying for a train ticket on condition that it arrives on time. In September, the ECB will publish a report on 70 conditional uses of the digital euro, suggested in particular by the private sector.
Responding to a question from Gilles Boyer, (Renew Europe, French), Mr Cipollone estimated that it would take 2.5 to 3 years (1.5 years to set up the infrastructure and one year to test it with the private sector) to put the digital euro into circulation once the European legislation has been adopted. “We’re ready to go”, he stressed.
‘Stablecoins’. Echoing the warning issued by ECB President Christine Lagarde (see EUROPE 13666/27), a number of MEPs, including Eero Heinäluoma (S&D, Finnish) and Kira Marie Peter-Hansen (Greens/EFA, Danish), criticised the Commission’s position on the risks associated with ‘stablecoins’, which they say are not sufficiently addressed by the MiCA regulation.
According to Mr Berrigan, this regulation does not allow ‘stablecoins’ to be banned and, when it was adopted, the EU considered this market to be important and knew that it would be dominated by US providers. Hence the introduction of “important safeguards” in the MiCA regulation and our desire, through a Q&A document, for them to be “clearly understood by supervisors”, he said.
As this subject comes up regularly, it is necessary to “discuss these guarantees in order to evaluate them”, said Aurore Lalucq, Chair of the ECON Committee. (Original version in French by Mathieu Bion)