EU finance chief: Digital euro bill to be presented in early 2023

The European Commission has announced that it will propose a digital euro bill in 2023.

According to Politico, Mairead McGuinness, the European Commission's finance chief, officially disclosed the EU's formal consideration of digital euro legislation at a fintech conference on Wednesday.

"Our aim is to introduce legislation in early 2023," the financial services commissioner said. "Targeted legislative consultation will take place in the coming weeks."

The European Central Bank (ECB) is already experimenting with designs and systems for a digital euro, with a prototype expected to be rolled out sometime in late 2023. If a digital euro is to be implemented, it needs to be approved by the eurozone leaders. If they give the green light, a digital euro could be issued by 2025.

A digital euro is a central bank digital currency (CBDC) — a financial instrument that central banks around the world are seriously exploring. The growing interest in CBDCs stems from growing concerns that the growing popularity of cryptocurrencies will eventually weaken national currencies.

"If we don't meet this need, someone else will," ECB executive board member Fabio Panetta said in mid-November when he pushed for a digital euro.

Last year, the ECB conducted research and published a report on digital currencies. A digital euro could help lower interest rates, speed up transaction processes and reduce the use of cash, the study found.

Whatever the benefits, central bankers face an uphill battle to win public support. Research conducted by the U.K. Council on Economic Affairs and the Bundesbank showed that a majority of respondents opposed government-backed digital currencies, citing skepticism about the benefits and concerns about government prying eyes.

But with the central bank of Kenya recently seeking public comment on the digital shilling, interest in CBDCs from official institutions around the world has picked up, while Thailand has already started to regulate a future retail CBDC. The Central Bank of the Bahamas was one of the first countries to launch a CBDC, launching the Sand Dollar in October 2020.

However, China maintains a first-mover advantage in the digital currency space. China has leapfrogged the international community to make sustained and significant leaps in the CBDC space.

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