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The European Commission announced on June 28 that it has proposed a legislative plan for the digital euro, aiming to make it a widely accepted and easily accessible form of payment.
The announcement emphasized that allowing individuals to receive digital euros through their banks on demand ensures easy access and prevents anyone from being left behind. The offer also includes provisions for free basic digital services in euros, privacy protection and offline payments.
As a separate proposal, the commission invited banks, insurers and funds to exchange customer data with fintech companies in exchange for compensation to help advance digital finance. Under the proposal, companies holding customer data would be required to share it promptly and continuously with participating companies at the request of customers, providing real-time access to the information.
With this move, the European Commission aims to open up a payments market that was controlled by banks, Visa and Mastercard and now faces competition from fintech companies offering alternative services. In addition, the proposed law prioritizes user privacy and data protection, and minimizes the risks of money laundering and terrorist financing.
The European Central Bank (ECB) welcomes the Commission’s proposal to ensure that cash remains a vital part of the payment system. He expressed support for the Commission’s proposal to retain the legal tender status of the euro cash. According to ECB President Christine Lagarde,
“We look forward to continuing to work with other European Union institutions on a digital euro to ensure that our currency fits in with the digital age.”
The study phase of the project will be completed by October 2023, after which the European Central Bank will start further development and testing. In the next phase, the ECB will continue to develop and test technical solutions and business mechanisms.
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A possible decision of the Governing Council on the issuance of a digital euro will be taken only after the adoption of the legislative act.