Mairead McGuinness, the European Commission’s Executive Vice President for Financial Stability, Financial Services, and Capital Markets Union, believes that there is no need to rush the implementation of the Digital Euro until after the next European Parliament elections in June 2024. According to McGuinness, the central bank digital currency (CBDC) project of the European Union should be approached “slowly and quietly” by the next European Commission approved by the future parliament.
The Need for Digital Currency
McGuinness mentioned the Digital Euro in her speech at Bruegel, a Brussels-based think tank, on September 6th. She emphasized that the fate of the project will be decided by the European Central Bank (ECB) in October. However, McGuinness added that this option should be explored:
“Cash is being used less today. We use our cards and phones for shopping, we engage in e-commerce, and if there was a time when cash was scarce, where would our money be if it’s not in cash? We need a digital version of it.”
In June, the European Commission proposed a legislative plan for the Digital Euro. The proposal includes provisions for free basic digital euro services, privacy protection, and offline payments. Banks, insurers, and funds will be required to share customer data with fintech companies in exchange for compensation.
Steps Taken for CBDC
Fabio Panetta, a member of the Executive Board of the European Central Bank, recently supported the commission’s plan by describing the European CBDC as a “new paradigm for preserving monetary sovereignty.” The research phase of the Digital Euro project must be completed by October 2023. After that, the ECB will continue with further development and technical solution tests. The 2024 European Parliament elections are planned to take place between June 6th and 9th, 2024. According to EU procedures, the newly elected parliament will approve or reject the candidates for the President of the European Commission and other members proposed by the European Council.
With all these developments, many central banks around the world continue to take steps towards central bank digital currencies. Especially the BRICS countries, Brazil, Russia, India, China, and South Africa, are taking significant steps in this regard. The main reasons for this situation are the unlimited printing of money in the US Dollar and the facilitation of international trade.
