European Union accelerates digital euro plans

The European Union is set to propose a digital euro bill in early 2023. In the coming weeks, the Commission plans to launch a public consultation on the uses of a central bank digital currency (CBDC). This is in line with other central bank's acceleration of CBDC plans.

The European Union announced that it will propose a digital euro bill in 2023. First reported by Politico, The European Commission said that the bill will be the legal foundation for the digital fiat currency that the European Central Bank has long been mulling over. The investigation phase of the digital euro was first announced in July 2021, which was then revealed to last up to 24 months.

Quickstart for the digital currency

But with the official announcement of the bill, it’s clear that the region’s authorities want to move quickly with a digital currency. The bill will see discussions and negotiations with EU capital and the parliament before it gets passed if it does so at all. The report also notes that a public consultation will be announced next month, focusing on the utility of the digital euro.

"If we don’t satisfy this demand, then others will do it. As co-legislators you will play a key role in any changes to the EU legislative framework that may be necessary to introduce a digital euro." - Fabio Panetta, ECB Executive Board Member

European Central Bank President Christine Lagarde, who has warned against cryptocurrencies in the past, has also spoken of the digital currency, noting its capacity to improve payment systems. But she, along with other EU executives, believes that there isn’t much time to waste as crypto and stablecoins grow more popular.

Growing concerns over stablecoins

There has been a deluge of news related to central bank digital currency (CBDC) development over the past few months. Governments are doing so both because they are aware of the benefits of the technology, as well as concerns related to stablecoins and cryptocurrencies. India, Jamaica, South Korea, and Malaysia are only a few of the many countries that have announced CBDC plans.

Conspicuously, the United States has not made an official announcement yet, though the Federal Reserve Chairman has said that CBDCs could coexist with stablecoins. It's possible that authorities do not want stablecoins encroaching on the sovereignty of national currencies, and regulatory challenges capsized Meta’s Diem plans. Besides more news of CBDCs, 2022 can be expected to see an increasing regulation of stablecoins.