Digital Euro: European Commission and ECB Team to Study Potential Pitfalls

Digital Euro: European Commission and ECB Team to Study Potential Pitfalls

TL;DR Breakdown

  • European Commission partners with ECB on the development and implementation of a digital euro.
  • ECB’s public consultation raises issue of privacy of the digital asset.

The European Commission is partnering with the European Central Bank (ECB) to deduce issues that could arise with developing and implementing a digital euro in the continent.

According to a joint statement released by the institutions, they are assiduously looking at how the digital euro can complement cash and other payment options in the region. The bodies also said their new partnership would be covering all issues related to “‘policy, legal and technical,” which would play a vital role in the design and the technicalities involving the currency. At the same time, it would provide the ECB with every necessary tool it would need when the body eventually decides to issue a digital euro.

The bodies agree that there is an increased need to introduce a crypto asset that would unify the continent in light of the current digitization rate and the changing landscape of the payment industry, plus the emergence of cryptocurrencies generally. This has made it mandatory for the bodies to act now in the interest of the continent.

According to EURACTIV, employees from both institutions would be drawn into a new working group that would consider issuing a digital euro.

Christine Lagarde, the ECB president, was reported to have said that the digital euro would be launched in the next five years.

Concerns emerge over Digital Euro.

The European Central Bank just closed a public consultation where it requested the public’s opinion on the digital euro’s developments.

This public consultation recorded over 8000 responses from individuals and companies across various fields and blocs.

Though the bank is yet to make a full review of the opinions, its preliminary report shows that over 40% of the respondents expressed concerns over the privacy of payments made with the currency. Others expressed concerns over security and the Pan-European reach of the asset.

Available information shows that the concerns raised in this consultation would be given attention to in the new partnership formed between the ECB and the European Commission.

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