In a blog, the European Central Bank (ECB) published its key objectives for the digital euro, authored by the bank’s executive board member Fabio Panetta and President Christine Lagarde. The bank suggests that the digital euro can be a success if it is widely used by European users
Some basic design considerations for a digital version of the European Union’s currency were laid out in an accompanying document.
“The digital euro can only be successful if it becomes part of the everyday lives of Europeans. It must add value compared with existing solutions”
The digital euro project was initiated by the ECB in June 2021 and an experimental/investigative phase was also kicked-off. The experimental/investigative phase was all about a retail central bank digital currency (CBDC). The EU’s executive arm responsible for proposing new legislation, the European Commission claimed that it will introduce a digital euro bill in 2023.
The two authors of the ECB post said that it should wrap up with the experimental/investigative phase very soon but it was way too early to settle on the details of the digital euro design.
In the mean time, the ECB has been to a great extent hesitant about the subtleties and discoveries of its examination, aside from irregular clues about a digital euro being launched in the next four years, and how the ECB would probably move to restrict the sum available for use to 1.5 trillion euros ($1.5 trillion) to control the adverse consequences it could have on monetary dependability.
Lagarde and Panetta likewise said the digital euro is planned for the purpose of payments, and will not be a type of investment (like how people currently invest in Euro as a currency).
The report prioritised that the digital form of Euro should first cater the needs of people who currently have limited access to digital payments.
“Otherwise too many commercial bank deposits could be moved to the central bank – a scenario which would make it more difficult for banks to lend to consumers and companies, and which could even generate tensions in the banking system during times of financial stress”
The report finally conveys that the introduction of “a digital euro would ensure that citizens can continue to trust in the monetary anchor behind their digital payments.” They also want to protect the “strategic autonomy of European payments” to maintain its “monetary sovereignty” and a backup for for geopolitical tensions.