Those keenly watching the European Central Bank (ECB) for a definitive stance on the digital euro might have to wait longer than expected.
The digital finance realm and policymakers received varied signals from the ECB, wrapping up its two-year study on a consumer-centric central bank digital currency (CBDC).
Stefan Berger, a notable figure from the German center-right policy faction who oversees digital euro discussions in the European Parliament, stated that an immediate decision isn’t on the horizon.
Berger communicated to DL News, “The final call from the ECB will be made post the committee and plenary votes and subsequent trilogue discussions.” In simpler terms, any decision regarding the launch of a digital euro might be at least half a year away. This interim period will allow European entities to frame the legislative foundation for such a currency.
Berger emphasised, “The ECB will make the final call on the digital euro. Before that, several unanswered questions need addressing.”
ECB’s leader, Christine Lagarde, reaffirmed to officials that the introduction of a digital euro isn’t imminent.
Recently, a faction of European Parliament members advised the ECB to pause any hasty decisions about a CBDC. They penned in a letter to the ECB, “We should not hasten the CBDC project without a thorough discourse on unresolved topics.” They flagged concerns about potential burdens the digital currency might levy on commercial banks anticipated to facilitate the CBDC. The true value and implications for the financial industry of the digital euro for average consumers remain ambiguous.
The intricate path towards a potential digital euro mirrors global dynamics. Some view digital official currencies as revolutionary. Yet, many crypto enthusiasts are apprehensive about central banks possibly overseeing individual spending through CBDCs.
Several EU Parliament members share this caution. To counteract notions that the CBDC is a surveillance tool or conspiracy, Lagarde and senior European authorities have had to clarify their position.
Xavier Lavayssière, a digital finance academic from Panthéon-Sorbonne University, remarked to DL News about the unexpected political pushback the ECB might be facing regarding the digital euro.
Despite leading crypto policies in the West, the ECB’s decision on the next digital euro phase might take more time.
The ECB refrained from commenting when approached by DL News.
ECB executive, Fabio Panetta, earlier clarified to the European Parliament that progressing to the next phase doesn’t signify the immediate release of a digital euro. It indicates the ECB’s plan to fine-tune technical and business aspects for the eventual roll-out.
However, this step might be premature for some skeptics, like Markus Ferber, a parliamentarian who co-signed the letter to the ECB. Ferber voiced to DL News that he believes the ECB might lean towards advancing the digital euro initiative after deciding on the subsequent phase this month.
Lagarde hinted at further prototype development. She projected another couple of years before a conclusive stance, as mentioned in a recent quarterly session with the European Parliament’s economic committee.