EU finance chief: digital euro bill to be introduced in early 2023

A bill introducing a digital euro will be submitted to the European Parliament for consideration as early as 2023, EU finance chiefs have announced.

The European Commission has announced that a digital euro bill will be proposed in 2023.

According to Politico, the European Commission’s finance chief, Mairead McGuinness, officially revealed the EU’s formal consideration of a digital euro legislation at a FinTech conference on Wednesday.

"Our goal is to introduce legislation in early 2023," the financial services commissioner said. "Targeted legislative consultation will take place in the coming weeks."

The European Central Bank (ECB) is already experimenting with designs and systems for a digital euro, with a prototype expected sometime in late 2023. If a digital euro is to be implemented, approval from euro zone leaders is required. If they give the green light, the digital euro could be issued by 2025.

The digital euro is a central bank digital currency (CBDC) – a financial tool that is being seriously explored by central banks around the world. The growing interest in CBDCs stems from growing concerns that the growing popularity of cryptocurrencies will eventually weaken national currencies.

"If we don't meet this demand, others will," said Fabio Panetta, a member of the ECB's executive board, when pushing for a digital euro in mid-November.

Last year, the European Central Bank conducted research and published a report on digital currencies. The study found that a digital euro could help lower interest rates, speed up transaction processes and reduce the use of cash.

Whatever the benefits, central bankers face an uphill battle to win public support. Research conducted by the UK Economic Affairs Committee and the Bundesbank shows that most respondents oppose government-backed digital currencies, citing skepticism about the benefits and concerns about government snooping.

But official interest in CBDCs around the world is starting to pick up as the Kenyan central bank recently solicited public comment on the digital shilling, and Thailand has begun to regulate future retail CBDCs. The Central Bank of the Bahamas was one of the first to launch a CBDC, launching the Sand Dollar in October 2020.

However, China maintains a first-mover advantage in the digital currency space. China has outgrown this international community, making continued and significant leaps in the CBDC space.