In brief
- The European Union has been talking about central bank digital currencies for some time now.
- Yesterday, the EU finance chief said that early next year a bill for a digital euro would be proposed.
A bill for a digital euro will be proposed early 2023, EU finance bigwigs announced yesterday.
In an announcement first reported by Politico, EU finance chief Mairead McGuinness said at a Wednesday conference that the European Union would formally consider legislation around a digital euro next year.
A digital euro would be the EU's version of a central bank digital currency (CBDC). A CBDC is a digital version of a fiat currency (like the euro or U.S. dollar), backed by a central bank. In this case, the European Central Bank would issue a digital version of the euro.
EU lawmakers have repeatedly talked about the benefits of a digital euro: the European Central Bank's president, Christine Lagarde, for example, has said that a European CBDC could complement traditional cash and "provide an alternative to private digital currencies"—like Bitcoin.
The European Central Bank last year conducted research on the advantages of a digital euro. A Euro CBDC, it is believed, could help lower bank's interest rates, make transactions smoother and faster, and minimize cash use.
Lagarde has spoken out about cryptocurrencies like Bitcoin and Ethereum and said such assets have no place in the central banking system.
Yesterday, McGuinness was quoted saying that the EU's "goal is to table legislation in early 2023," with "a targeted legislative consultation in the coming weeks."
The European Union, a political and economic union of 27 member states, is currently lagging behind other nations in terms of issuing a CBDC. China, for example, is in the middle of piloting its e-CNY (electric Chinese yuan) while the Bahamas launched its Sand Dollar in 2020.
Meanwhile, the Federal Reserve in the United States is still researching the technology and pondering on whether to release one—and seems more focused on regulating stablecoins.