The European Commission will present a legislative proposal for a digital euro in the near future, European Central Bank President Christine Lagarde said. European lawmakers are expected to define the legal tender of the new currency and determine its privacy features.
European Commission to propose legislation for eurozone digital currency
Eurozone authorities are already well advanced in studying the rationale and potential benefits and risks of a central bank digital currency (CBDC), the head of the European Central Bank (ECB) said at a conference on the digital version of the common currency.
In a video message, Christine Lagarde said that their efforts are now focused on the concrete design of the digital euro and its integration into a legal framework. This is an area in which EU legislators will play an important role, stressed and revealed the top executive :
I therefore look forward to the legislative proposal on the establishment of a digital euro that the European Commission will soon propose.
The executive body in Brussels is one of the main participants in the European Union’s complex legislative process, along with the European Parliament and the Council of the EU, and is responsible for suggesting new laws.
In her statements, published on the ECB, Christine Lagarde stressed that co-legislators must now define the balance between competing public objectives. She emphasized two aspects in particular: the protection of privacy and the legal tender of the digital euro.
New legislation to determine privacy features and legal tender status of the digital euro
Recalling that 43% of respondents to the public consultation on the digital euro ranked privacy as the most important feature of the future CBDC, the president of the Eurozone monetary authority acknowledged that for the coin to be attractive, it must meet people’s expectations in this regard.
“We should at least offer a level of privacy equal to that of current electronic payment solutions“Christine Lagarde emphasized, while ruling out total anonymity, as offered by cash, citing anti-money laundering rules and the need to limit the use of the digital euro for investments. However, she did not rule out greater privacy for low-value, low-risk, offline payments.
Expanding on the other aspect she highlighted, Christine Lagarde insisted that cash, as a central bank currency, is legal tender and said the same principle should apply to the digital version of the euro, allowing citizens to use it to pay anywhere. This should include digital payments in physical stores, e-commerce and peer-to-peer payments, the ECB chief said.
In her speech, Christine Lagarde also highlighted the importance of future legislation on crypto asset markets (MiCA) and listed the emergence of crypto-currencies such as bitcoin and ether among the main developments leading to a potentially disruptive transformation of the traditional payments model.