The European Central Bank executive, Fabio Panetta, stated in a speech that the EC proposal for the digital euro could give the CBDC legal tender status.
In a speech at the Economic and Monetary Affairs Committee, the executive said that the European Commission’s legislative proposals for the digital euro place Europe at the forefront of advanced economies. Panetta added that the digital euro could be a new form of central bank money.
The European Commission (EC) revealed its proposal for the digital euro on June 28. The ECB executive explained that the digital euro will preserve European monetary sovereignty, helping citizens access a public payment option.
The digital euro’s development
Fabio Panetta, an executive board member of the ECB, has set a deadline of three to four years to launch the digital euro. He mentioned that 50 people are working on the digital euro project, studying its design, distribution, and impact on the financial sector. The ECB plans to start a test phase for the central bank’s digital currency, which could last two or three years, after preparing a legislative proposal.
In a statement issued after a meeting in Brussels, the eurozone finance ministers emphasized their support for digital euro research. They also highlighted that specific design and application features under consideration would necessitate political decisions. The European Central Bank and European Commission have taken up the task of keeping the Eurogroup and EU member states updated on the progress of the digital euro’s construction.
The ECB has released progress reports on the digital euro, outlining different approaches and distribution options. The initial plan is to make the digital euro accessible to euro area residents, governments, and merchants. Non-resident Euro-area citizens may also have access if they hold an account with a euro-area-based payment services provider. The report also mentions the possibility of expanding access to consumers from selected third countries and exploring cross-currency functionalities with other central bank digital currencies.