Bill for Digital Euro is ready, but politicians are not convinced.
The European Central Bank (ECB) and European Commission are working on the technical details for a digital euro, but political decision-makers seem unenthusiastic about the central bank digital currency (CBDC). New laws to support the CBDC address privacy, offline use, and distribution, and are expected to be published next week. However, while the technical issues are being addressed, the political ones are not. The proposed bill focuses on what the CBDC should not do, such as prohibiting holdings from getting too large or being paid interest, to prevent the CBDC from competing with savings or investment. Politicians complain that what is missing is the positive case for what the CBDC should do, which could be responsible for some of the late-stage difficulties in producing the formal legislative proposal. At a recent meeting, euro finance ministers discussed the importance of developing a compelling and clear narrative regarding the added value of the CBDC and the difference that it would make to the lives of citizens and the commercial activity of businesses. Making a case to citizens, however, can be an uphill struggle, as few in the general public, even the tech-savvy ones, have heard of a digital euro or know much about it. Skepticism is shared in the European Parliament, where a recent debate revealed a wide range of concerns. Some lawmakers simply wonder what the point is. The problem may lie in the relative sophistication of the EU’s existing payment networks, which already offers regular citizens a host of digital ways to pay.
“I believe that most members of parliament will ultimately support the proposal for the digital euro,” said Ferber. “However, it would be much easier if there was a stronger argument in favor of the project.”
Edited by Sandali Handagama.
