2023, the year of Digital Euro

2023, the year of Digital Euro

A law proposing a digital euro will be introduced in the European parliament as early as 2023, according to the European Union’s finance minister. The European Commission plans to present a law for a digital euro in 2023, according to the European Commission.

 

At a fintech conference on Wednesday, EC finance chief Mairead McGuinness officially revealed the EU’s formal study of digital euro legislation, as first reported by Politico.

 

“The Commissioner of Financial Services stated, “Our intention is to table legislation in early 2023.” “In the next weeks, there will be a targeted legislative consultation.””

 

The European Central Bank (ECB) is already experimenting with digital euro designs and technologies, with a prototype expected in late 2023. The consent of Eurozone governors is required if a digital euro is to be introduced. If they give their approval, the digital euro may be in circulation by 2025. The digital euro is a central bank digital currency (CBDC), a financial instrument being studied by central banks all over the world. The heightened interest in CBDCs stems from growing concerns that the popularity of cryptocurrencies may eventually threaten native currencies.

 

In mid-November, ECB Executive Board member Fabio Panetta pushed for the deployment of a digital euro, saying, “If we don’t supply this need, others will.”

 

Digital Euro And Interest Rate

 

The European Central Bank (ECB) conducted research and published a report on digital currencies last year. It was discovered that a digital euro might help reduce interest rates, speed up transaction processes, and reduce the need of currency. The digital euro is a central bank digital currency (CBDC), which is a financial instrument that central banks all over the world are looking at. Concerns that native currencies will be undermined by the rising popularity of cryptocurrencies have sparked increased interest in CBDCs.

 

In mid-November, ECB Executive Board member Fabio Panetta pushed for the deployment of a digital euro, saying, “If we don’t meet this need, others will.”

 

The European Central Bank (ECB) published a study on digital currencies last year after doing research. It was discovered that a digital euro may reduce interest rates, speed up transaction processes, and reduce the use of currency. Regardless of the ostensible benefits, central bankers have an uphill struggle in winning public support. The majority of respondents oppose government-backed digital currencies, according to research undertaken by the UK economic affairs committee and Germany’s central bank, citing skepticism about advantages and worries of government spying.

 

Official interest in CBDCs has risen throughout the world, with Kenya’s central bank recently soliciting public feedback on a digital shilling and Thailand already putting in place regulations for a potential retail CBDC. The Sand Dollar, introduced by the Central Bank of the Bahamas in October 2020, was one of the first CBDCs to be introduced.