- The European Commission and the European Central Bank will meet to consider the potential pitfalls of the digital euro
- Public consultation showed that privacy is the major concern of the digital euro
- The digital euro project which was first announced in October 2020 may get underway in mid-2021
The joint team consisting of the European Commission and the European Central Bank (ECB) have announced that they will be meeting to consider potential issues that could arise from the digital euro.
The meeting will be held to check all necessary boxes before the development of the digital currency begins this summer. The European Central Bank first announced its intentions to move for the digital euro in October 2020.
The Digital Euro
As the crypto industry pushes the digitalization of money further, countries around the world are beginning to move for digital currencies. The Digital Euro is Europe’s answer to digital currencies.
According to the ECB, the digital euro would remain like traditional banknotes but digital. This electronic form of money would be issued by the Eurosystem (the ECB and national central banks) and accessible to all citizens and firms.
The ECB clarified that although the digital euro would have the same value as traditional cash, it would not replace it but rather complement it.
The digital Euro would be a simple, universally accepted, safe, and trusted means of payment. It would give users an additional option to make payments and make it easier to do so, contributing to financial inclusion alongside cash.
On the Flipside
- According to the International Monetary Fund, only 23 percent of countries can issue a digital currency.
- However, China has moved closer to launching the very first sovereign digital currency
- China launched the second trial of the electronic yuan worth over $3 million distributed among 100,000 residents in the tech hub of Shenzhen
The ECB and EU Meet to Consider Potential Pitfalls of the Digital Euro
The two European Union institutions met on Tuesday, January 19 to cooperate on setting the project in motion sometime in mid-2021, they said. Part of the published joint statement reads.
Such a project would answer key design and technical questions and provide the ECB with the necessary tools to stand ready to issue a digital euro if such a decision is taken.
The announcement comes after the ECB closed a public consultation on its plans for the digital euro on January 12. In the consultation, it was discovered found privacy was a primary concern among 41 percent of respondents.
Earlier this month, the President of the European Central Bank, Christine Lagarde announced that she expects the digital euro to launch in no more than five years.
The joint statement noted that there will be future meetings between both institutions. In these meetings, Future meetings the “policy, legal and technical questions emerging from a possible introduction of a digital euro” would be smoothed out.