EU Chief Warns Against Rushing Digital Euro Before June 2024

Mairead McGuinness, the European Commissioner for Financial Stability, Financial Services, and the Capital Markets Union, believes there is no reason to rush the introduction of the digital euro until after the June 2024 elections for the European Parliament.

According to her, the central bank digital currency (CBDC) initiative of the European Union should be approached “quietly and slowly” by the incoming European Commission, which will be approved by the incoming parliament.

On September 6, McGuinness spoke about the digital euro at the Brussels-based think tank Bruegel. She emphasized that the European Central Bank (ECB) will determine the fate of the initiative in October.

“Cash is less in use. We are using our cards and phones to buy, we’re doing e-commerce, and if there were a time when cash was very much diminished, then where do we have public money — the central bank public money — if it’s not in cash? We need a digital version of this”

However, the official added that this option must be explored. The European Commission proposed legislation for a digital euro in June.

The proposal contains provisions for free essential digital services, preservation of privacy, and offline payments. Banks, insurers, and funds would be required to share consumer data with fintech firms in exchange for financial compensation.

Fabio Panetta, a member of the ECB’s executive board, recently endorsed the commission’s proposal, calling the European CBDC “a new paradigm for preserving monetary sovereignty.

By October 2023, the investigation phase of the digital euro initiative should be concluded. The ECB will then proceed with further development and testing of technical solutions.

The European Parliament elections of 2024 are scheduled for June 6 to 9, 2024. According to EU procedures, the newly elected parliament will then endorse or reject the president and other candidates proposed by the European Council for the European Commission.