EU finance ministers set roadmap to launch digital euro, though issuance could take years: Reuters
Quick Take
- EU finance ministers agreed on a roadmap for a digital euro and on procedures that would give ministers a say on whether to launch and on holding limits, according to Reuters.
- Despite the agreement, issuing the digital euro could still take years.
- The digital euro has been the center of heated discussion, with some EU member states expressing concerns over the token’s privacy implications.
European Union finance ministers moved closer this week to a common position on the bloc's planned central bank digital currency (CBDC), the digital euro, which the EU frames as a strategic alternative to U.S.-dominated payment rails like Visa and Mastercard.
The latest push emerged from ministerial meetings in Copenhagen, where officials discussed how a digital euro could operate alongside commercial bank money while giving consumers and merchants an online wallet issued against the Eurosystem’s balance sheet.
A compromise agreement reached between EU finance ministers, European Central Bank (ECB) president Christine Lagarde, and European Commissioner Valdis Dombrovskis will give the EU ministers a say on whether or not a digital euro is issued and how much money each EU resident will be able to hold in the digital euro in order to assuage fears of bank runs, according to a recent Reuters report.
"The digital euro is not just a means of payment, it is also a political statement concerning the sovereignty of Europe and its capacity to handle payment, including on a cross-border basis, with a European infrastructure and solution," Lagarde said at a press conference.
Despite the progress, the issuance of a digital euro could still take years, according to the report. The European Parliament still needs to approve the legislation, with debates expected to heat up this fall. The ECB hopes to have the legislation in place by June of 2026, Reuters reported, after which it could take the agency up to three years to issue the euro.
The digital euro also faces a threat from Spaniard Fernando Navarrete Rojas, a center-right EU lawmaker who has expressed skepticism over the project, and is currently the rapporteur on the digital euro file. Navarrete earlier this year published a 27-page paper titled "Do we really need a digital euro?" in which the lawmaker frames the digital euro as a solution to a problem no one asked for.
"Amidst the ECB’s shifting narrative, the possible risks associated with a digital euro, such as the destabilising effect it could have on financial stability...data privacy concerns that have sparked significant public debate, and the allocation of additional responsibilities in areas such as fraud prevention and anti money laundering, should be carefully assessed," Navarrete wrote recently.
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