The EU’s track on the CBDC agenda has previously been scrapped following internal discussions earlier this week.
The European Union market is readying to adopt a digital Euro, a CBDC backed by the EU market, after the current EU Commissioner for Financial Stability, Financial Services, and the Capital Markets Union, Mairead McGuinness noted that she will present a bill next week on the matter. The EU CBDC plan is set to cover sensitive matters on distribution, privacy, and also offline transactions capabilities. Moreover, according to a study conducted by Juniper Research, the global value of central bank digital currencies (CBDCs) will grow dramatically from $100 million in 2023 to about $213 billion by 2030.
With the European Union market controlling more than 20 percent of global economic activities, a digital Euro is expected to further expedite the process of digitization. Furthermore, many countries around the world are looking into the digitization of their economy to ensure sustainable growth.
Nonetheless, the plan to establish a digital euro hit a snag after several issues were raised about a CBDC in the region. For one, some people have felt that the issuance of CBDC would give the monetary issuers huge authority over the users. Technically, a CBDC issuer can seize a user’s cash or block certain transactions from going through, a privilege not eloquent enough with the banknotes or coins.
Reportedly, the EU had removed the tentative CBDC agenda that was published by the commission earlier Tuesday. Nonetheless, Commissioner McGuinness told an event in Brussels of the digital euro plans and a parallel law on the legal status of cash that a proposal on CBDC is due next week.
Why the EU Needs a Functional CBDC
According to the European Union Central Bank, a digital Euro would significantly benefit all parts of society by ensuring citizens’ privacy, and market resilience. Moreover, the ECB has previously noted that it is not interested in seeing or storing users’ private information.
“A digital euro will be designed to take on board people with no access to a bank account and with low digital or financial skills, as well as people with disabilities,” the ECB noted in a recent report.
The EUC has been conducting the need for a digital euro and the best ways to roll out the CBDC plan. With the European Union’s Markets in Crypto Assets law (MiCA) already published in the Official Journal of the European Union (OJEU), the region is expected to remain ahead of other major global markets like the United States that is still struggling with coming up with clear rules.
After closely conducting research on the CBDC market, the ECB is expected to take a decision later this year on whether to continue with the plan of rolling out. Furthermore, the EU bloc intends to go through an economic phase to help in sustainable growth.
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