The European Commission (EC) and the European Central Bank (ECB) are joining forces to work through a range of key legal, policy, and technical questions that may arise as the Eurosystem moves towards the introduction of a digital euro.
In a new statement, the EC and ECB say that they are forming a joint task force that will look into the policy, legal and technical aspects of Europe’s very own central bank digital currency (CBDC).
“The ECB and the European Commission services are jointly reviewing at technical level a broad range of policy, legal and technical questions emerging from a possible introduction of a digital euro, taking into account their respective mandates and independence provided for in the Treaties.”
The ECB’s initiative comes as Europeans increasingly move away from cash towards digital means of payment. In a comprehensive report on the potentials and pitfalls of a digital euro, the ECB says a digital euro could combine the safety and stability of central bank money with the efficiency of modern digital financial technology.
ECB board member Fabio Panetta said in October that concerns relating to the technical and legal aspects of a CBDC need to be ironed out in order to achieve legal tender status. In addition to ensuring that the digital euro is simple and easy to use, Panetta says it should be rooted in citizens’ trust.
“To be successful, a digital euro would also have to enjoy strong support from the public. It would be a digital symbol of progress and integration in Europe. And it would support the international role of the euro.”
The ECB launched extensive public consultations on October 12th, gathering over 8,000 responses from various stakeholders.
According to a preliminary analysis of the responses, privacy ranked highest among the requested features of a digital euro, garnering 41% of the votes, followed by security and pan-European reach.
Bringing together experts from several government institutions, the task force is set to publish a comprehensive analysis of the public consultations and complete extensive preparatory work by mid-2021, which will serve as an important factor in deciding whether or not to fully pursue a digital euro.
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