Members of the European Commission insist that the design and use elements of the future digital euro require careful consideration of the political implications. Full political conformity would help avoid potential mistakes in the design phase.
Eurozone finance ministers from the European Commission released a statement addressing key policy aspects of the design and release of the digital euro.
According to the statement, policymakers believe that the CBDC being developed must comply with three fundamental principles:
- be a pan-European inclusive project;
- be supported by the European public;
- have a solid democratic basis.
Therefore, the members of the European Commission insist that all major decisions concerning the design of the digital euro and the possibilities of its future use should be discussed and taken at the political level. Namely, the decision to issue the CBDC should be made by lawmakers based on the existence of the necessary legal regulations in the Eurozone.
The statement said the European Commission “reaffirms its support” for the efforts of the European Central Bank (ECB) and other parties involved in developing the digital euro. The ministers also believe that the CBDC could be a key factor in strengthening the European Union’s “open strategic autonomy” if the digital currency is properly designed. That’s why they insist on full political conformity of the future CBDC, which could stimulate innovation in the financial sector while preserving the role of “an anchor for our monetary system.”
Among the main challenges seen by the European Commission at this stage of developing the digital euro were:
- the environmental impact of the digital currency;
- CBDC users’ privacy;
- potential effects of the digital euro on the EU’s financial stability.
The statement was published the day after the ECB released a report on the successes and progress of the digital euro. The key conclusion of the ECB report was that the CBDC could strengthen the Eurozone’s strategic autonomy and increase its independence from non-European payment solutions.
The first results of the digital euro pilot project should be ready by the end of this year. The main focus is the use of the CBDC by EU citizens for personal transfers. That’s why the ECB is considering introducing limits on storing and using the digital euro.