German Member of the European Parliament (MEP) Stefan Berger has stepped forward to guide the formulation of new regulations for the digital euro, a digital version of the euro currency.

Berger, who previously played a pivotal role in shepherding the EU's groundbreaking regulation on Markets in Crypto Assets (MiCA), will now lead similar efforts concerning the development of a central bank digital currency (CBDC).

The digital euro has garnered mixed reactions from Berger's fellow colleagues, many of whom remain cautious about its potential.

What is MiCA?

Ratified by the European Parliament on April 20, 2023, the MiCA directive, also known as the Markets in Crypto-Assets Regulation, stands as a momentous regulatory paradigm within Europe.

This framework has been meticulously crafted to effectively govern the dynamic cryptocurrency landscape, providing a comprehensive oversight.

Its fundamental objective is the creation of a cohesive framework of guidelines that encompass digital assets and their associated services across the confines of the European Union.

Anticipated to unfold incrementally, the MiCA directive is slated for gradual implementation spanning the period from 2024 to 2025.

Response from Berger

Berger, known for his affiliation with the center-right political stance, emphasized the significance of a digital currency for the EU's autonomy and its adaptation to the digital era.

He shared his perspective:

Translated, it says:

"Having its own digital currency makes the EU less dependent on third-party countries and aligns with the digital age. However, the project will only succeed if trust in the digital Euro can be established, just like with physical cash."

ECB Support for CBDC

While the European Central Bank (ECB) has yet to officially decide on the issuance of the CBDC, it has actively invested resources in its technical planning.

The formulation of laws to support the digital currency will involve collaboration between the European Parliament and the Council, a body comprising EU national governments.

Areas such as data protection will need legislative backing.