on the crypto
The European Commission (EC) will work with the European Central Bank (ECB) to examine the potential risks of developing and issuing a digital euro.
An in-depth investigation of EU bodies before starting the digital euro project
In a joint statement last week, the two institutions of the European Union stated that they have started a functional collaboration to explore the possible consequences of the development of a digital euro.
In this way, the European Commission and the ECB intend to integrate the payment solutions currently available in addition to cash. This partnership will enable the ECB and the European Commission to continue their efforts to create and promote a healthy and vibrant European digital finance sector.
The two regulators have stated that they are committed to investigating every legal breach before the project for the development of the digital euro begins by the end of the summer. The investigation and subsequent development of a digital euro are driven by the rapid digitization of the payments industry and the emergence of crypto-assets that are reshaping the financial landscape globally.
Integrate into the new digital payments landscape
This would also help to foster a well-integrated payments sector capable of responding to the new payment needs on the continent. The ECB will decide whether to launch the digital euro development project this summer following the public consultation this month and a period of preparatory work.
The project will address crucial design and technical issues and will provide the European Central Bank with the necessary tools to issue a digital euro. Advancement in the CBDC industry is key to continuing to keep pace with developments in the digital asset industry globally.
"The ECB and the services of the European Commission are jointly examining (at a technical level) a wide range of political, legal and technical issues arising from a possible introduction of a digital euro, taking into account their respective mandates and independence under the Treaties . "
Concerns regarding privacy and security
CBDCs pose privacy concerns according to Euractiv. Earlier this month, the ECB conducted a public consultation regarding its plans for a digital euro, and most respondents were concerned about the privacy aspects of the project.
41% of respondents expressed concern about the lack of privacy in payments made with a potential digital euro. Security is another concern as it emerged that 17% of respondents believe a digital euro would not be secure enough.
However, Fabio Panetta, chair of the task force on a digital euro and a member of the ECB's executive board, believes the digital euro would strengthen the resilience of privacy in digital payments. Earlier this month, ECB President Christine Lagarde said she expects the digital euro to be available in less than five years.
