The European Central Bank is already studying and experimenting with different models and variants of the digital euro, whose arrival, if approved among the members of the eurozone, would not arrive until at least 2025, but which will already have its first steps to reach next year with a firm project under the arm.
The bill will arrive in early 2023
The European Union is ready to propose a digital euro bill in early 2023. The digital euro research phase was first announced in July 2021 and was revealed to last up to 24 months.
Germany and France last year urged the European Central Bank to speed up the process for fear that the eurozone will be left behind. Other emerging countries and economies have already taken the first steps towards digitizing their currency. The People’s Bank of China began its journey towards a digital yuan in 2014. Meanwhile, the Indian Ministry of Finance has committed to having a virtual version of the rupee by the end of this year.
These terms will be shortened by the growing fear that national currencies will end up being overtaken by the growing popularity of cryptocurrencies. The EU finance chief, Mairead McGuinnessrevealed at the financial technology conference in Afore Consulting that “the objective is to present the legislation at the beginning of 2023 and a specific legislative consultation in the coming weeks«.
Steps towards the digital Euro
The digital euro is a digital currency issued by a central bank (Central Bank Digital Currency, CBDC for its acronym in English), which therefore has the property of being a form of money that is regulated by a state or by a union of states. This proposal seeks to solve the problem, especially of costs and infrastructure, which is the physical version of fiat money (coins and bills).
A digital euro would not replace cash, but would complement it. The Eurosystem will continue to ensure that euro banknotes and coins are accessible throughout the euro area.
This financial instrument is being explored very seriously by central banks around the world. The European Union is already experimenting with different designs and systems for this digital euro which must first be approved by all the governors of the eurozone and, if so, could be ready for issuance in 2025.
In addition to the countries listed above, also others such as Jamaica, South Korea, and Malaysia are among the many countries that have announced digital currency plans. Governments are taking the step towards CBDCs because they are aware of the benefits of technology, highlighting the ability of cryptocurrencies to improve payment systems, as the president of the European Central Bank did, Christine Lagardeas well as concerns related to the stablecoins and cryptocurrencies.