European Commission aims for universal acceptance with Digital Euro proposal

With this move, the European Commission aims to open up the payments market that has been controlled by banks, Visa and Mastercard.

The European Commission announced on June 28 that it has proposed a legislative plan for a digital euro, aiming to make it a widely accepted and easily accessible form of payment.

The announcement emphasized that allowing individuals to obtain digital euros through their banks upon request ensures easy accessibility and prevents anyone from being left behind. The proposal also includes provisions for free basic digital euro services, privacy protection and offline payments.

As a separate proposal, the commission suggested that banks, insurers, and funds should share customer data with fintech companies in exchange for compensation, aiming to promote the advancement of digital finance. Under this proposal, companies holding customer data would be required to promptly and continuously share it with participating companies upon customer request, ensuring real-time access to the information.

With this move, the European Commission aims to open up the payments market that has been controlled by banks, Visa and Mastercard and is now facing competition from fintech companies offering alternative services. Furthermore, the proposed legislation prioritizes user privacy and data protection, while also minimizing the risks of money laundering and terrorist financing.

The European Central Bank (ECB) welcomes the Commission’s proposal aiming to ensure that cash continues to be a vital part of the payments system. It expressed its support for the Commission’s proposal to safeguard the legal tender status of euro cash. In the words of ECB President Christine Lagarde,

“We look forward to continuing working together with other European Union institutions towards a digital euro to ensure our currency is fit for the digital age.”

The investigation phase of the project will be completed by October 2023, after which the European Central Bank will proceed with further development and testing. In the next phase, the ECB would further develop and test the technical solutions and business arrangements.

Related: EU finalizes controversial smart contract kill switch rules under Data Act

A possible decision by the Governing Council to issue a digital euro would be taken only after the legislative act is adopted.

Magazine: Best and worst countries for crypto taxes — plus crypto tax tips