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The proposal for a regulation to introduce a digital euro is expected to be presented on 28 June. It will then have to be approved by both the European Parliament and the member state governments in the EU Council.
While it was unclear in what form the digital euro should be introduced, the leaked document now suggests that the Commission wants to make it accessible not only to banks but primarily to the public at large as a retail payment option.
One of the motivations behind the proposal is the desire to “reduce the fragmentation of the European retail payments market, to promote competition,” and “to encourage industry initiatives to offer pan-European payment services,” according to the draft proposal.
Moreover, the digital euro is a reaction to technological developments.
The discussion around the digital euro first picked up speed when a consortium around Facebook (today Meta) started the Libra project with the aim of creating its own digital currency. While the Libra project was abandoned in the meantime, the fear of losing monetary control to private initiatives remained.
“In the euro area, the establishment of a retail CBDC (central bank digital currency) – the digital euro – is necessary to supplement cash and adapt the official forms of the currency to technological developments,” the explanatory statement of the draft proposal reads.
By going for a retail CBDC, the EU would take a different path than other jurisdictions. The Swiss National Bank, for example is mainly interested in a wholesale CBDC that could be used to facilitate interbank settlements.
The digital euro would be legal tender, meaning that economic operators will have to accept payment in digital euro, although there are exceptions, for example for microenterprises with fewer than 10 employees and less than €2 million in annual turnover....
more at EURACTIV