- 2023-07-07
The European Union has announced plans for digital euro legislation
The European Commission has published two proposals: one to ensure the status of cash in the euro zone, and the other to set out a legislative framework for the ECB to issue digital euros in the future, spelling out the status of cash and digital euros.
The main contents of the IT House summary proposal are as follows:
The purpose of Proposal I is mainly to maintain the role and status of cash, so that cash can continue to become a widely accepted payment method, cash is regarded as the legal tender of the euro area, and EU member states must ensure the ability to pay and obtain cash. The main reason not to allow cash to be replaced by digital currencies is financial inclusion to reach the elderly or other vulnerable groups who rely on cash.
Proposal 2 establishes a legislative framework for digital currencies in order to cater to the global trend of digital currencies, bring an alternative payment solution, and at the same time enhance the international status of the euro. According to the framework, the future digital Euro will co-exist with existing credit card or program payments, and the digital Euro will become a part of online payments, and people can use digital euro payments anytime, anywhere.
In addition, banks and online payment channel providers in the EU can distribute digital euros, basic digital euro services should be free, and people should be able to open and hold a digital Euro account even if they do not have a bank account.
The European Central Bank issued a statement on the same day welcoming the proposals. The European Central Bank launched the Digital Euro Project in 2021, a 24-month investigation into the design of the digital euro, which is expected to end in October. At that point, they will decide whether to proceed to the next phase involving the development and testing of relevant solutions.
Christine Lagarde, President of the European Central Bank, pointed out that the euro is the most concrete symbol of the European Community, which is valued and trusted by the general public, and the European Central Bank looks forward to continuing to work with other EU organizations to develop a digital euro to ensure that the currency of the EU area is in line with the digital age.