Fabio Panetta, an executive board member of the European Central Bank (ECB), emphasized the potential for the European Commission’s (EC) proposal for the digital euro to grant the Central Bank Digital Currency (CBDC) legal tender status.
Digital Euro Proposal
Panetta hailed the EC’s legislative proposal for the digital euro, which was unveiled on June 28, as a groundbreaking step that positions Europe at the forefront of advanced economies. He noted that this digital currency could be a revolutionary form of central bank money, reshaping the financial landscape across the Eurozone.
The primary objective of the digital euro is to safeguard European monetary sovereignty while providing citizens with access to a secure and convenient public payment option. Panetta disclosed that the ECB has set a target of three to four years for the official launch of the digital euro. Currently, a team of 50 experts is diligently working on various aspects of the project, including its design, distribution mechanisms, and its potential impact on the financial sector.
Digital Euro Roadmap
The ECB’s roadmap for the digital euro entails a two to three-year testing phase following the preparation of a legislative proposal. Eurozone finance ministers expressed their unanimous support for the research into the digital euro, underscoring the importance of addressing specific design and application features through political decisions. Collaboration between the European Central Bank and the European Commission is key to keeping the Eurogroup and EU member states informed about the digital euro’s progress. Progress reports have already been released by the ECB, detailing different approaches and distribution options.
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Initially, the digital euro is intended to be accessible to residents, governments, and merchants within the euro area. Non-resident Euro-area citizens may also gain access if they maintain an account with a payment services provider based in the euro area. Moreover, there are plans to explore the possibility of extending access to consumers from selected third countries and exploring cross-currency functionalities with other central bank digital currencies.