A European Union-backed digital Euro will be introduced sometime in 2023, according to a top EU official.
First reported by Politico, the European Commission’s (EC) finance chief Mairead McGuinness said that the EU will officially propose a bill that will serve as the legal foundation for a virtual version of the Euro early next year.
Speaking at a fintech conference by Afore Consulting, McGuiness said:
“Our goal is to table legislation in early 2023… A targeted legislative consultation in the coming weeks.”
Talk of government-backed digital currencies has picked up after privately backed-crypto assets, particularly dollars, have meteorically risen to prominence, now adding up to nearly a quarter of a trillion dollars in market cap.
As the 2022 Winter Olympics go on in Beijing, China is already testing out its digital Yuan (eCNY). The proposed CBDC is currently being offered to athletes and foreign visitors to Olympic Village in Beijing, as well as cash or Visa cards. The rollout is the most prominent pilot program for the digital currency since the country began exploring CBDCs in 2019.
Some American officials are worried that China is getting the upper hand on digital currencies, as the US still doesn’t have solid plans for the rollout of its own federal-backed virtual USD.
In a new interview, Christine Lagarde, head of the European Central bank (ECB), further signaled the need for a digital Euro, lamenting the rise of private entities gaining a foothold on stablecoins.
“We need to have an answer to that. We cannot allow users’ personal data to be monetised. Moreover, the technology used in private digital currencies also creates new, alarming opportunities, e.g. for terrorism financing and money laundering. This is why creating a digital euro must be a public project. It also strengthens Europe’s sovereignty.”
Lagarde says that Europe is already too dependent on other geographies, relying on Visa and Mastercard for its payments systems, and Russia and Asia for its oil, gas and microchips.
“…You notice the high price of dependence on external suppliers. This is where we lack autonomy. I think that we need to be just as cautious in the area of finance,” she said.
While the rise of digital currencies brings visions of dystopic surveillance grids for many, LaGarde says she doesn’t yet have any interest in getting rid of cash.
“People are used to cash and are not willing to give it up. This is why I don’t think we need to have a discussion about scrapping cash. I also like having banknotes in my purse. And now they even have my signature on them (laughs).”