25 February 2022, 16:40
New technologies in banking and payments are giving rise to new services and business models by established financial institutions and new market entrants. A properly-designed digital euro that is safe, easy to use and widely accessible to the public has the potential to foster innovation in the financial system and deliver major benefits for citizens, businesses, Member States. It can strengthen our financial and monetary sovereignty and contribute to the overall functioning of our economic and monetary union, building on mutual trust and engagement among all stakeholders involved, and it is relevant for the international role of the euro.
Informed by preliminary work of the ECB and the European Commission, the Eurosummit in March 2021 invited the exploratory work on the possible introduction of a digital euro to be taken forward. On 14 July 2021, the ECB Governing Council decided to launch an investigation into the possible issuance of a digital euro to complement cash. The investigation phase will last 24 months and aims to address key issues regarding design and distribution. This will not prejudge any future decision on the possible issuance of a digital euro, which will come only later.
In order to be successful, the possible issuance of a digital euro needs to be a common European project, supported by the European public and with a solid democratic basis. The creation of a digital euro would require an intervention of the Union legislature; and the Commission intends to make a proposal on the basis of Article 133 TFEU. In this context, we welcome the intention of the Commission to launch a targeted public consultation on a digital euro as part of the pre-legislative process.
The Eurogroup supports the work carried out by the Eurosystem and the Commission on a digital euro. This investigative work needs to build on careful and thorough analysis and will benefit from Eurogroup members’ views during the process. The digital euro is a complex and important project with potentially far-reaching impacts for citizens, businesses, and the EMU as a whole.
The Eurogroup therefore agreed to regularly revisit this topic and discuss its various dimensions, notably with a focus on their political relevance. This will allow us to provide clear views on the general objectives and political dimensions of a digital euro and the trade-offs in full respect of the institutional roles and mandates of all actors involved.
The Eurogroup identified a number of topics on which it will make contributions, working closely with the ECB and the Commission. A plan for regular Eurogroup discussions on the implications of a digital euro, based on input from the ECB and the Commission, was agreed in July 2021* based on four thematic areas with a view to a thorough technical preparation of our discussions on this topic.
We began in November 2021 by discussing the policy objectives and uses of a digital euro in the global competitive context, taking into account broader initiatives at the international level. Ministers saw an important role for a digital euro in strengthening our open strategic autonomy, promoting the digital transition and the development of pan-European payment solutions, the continued availability and usability of central bank money and financial inclusion.
Today, the Eurogroup took stock of developments so far, based on an update from the ECB and the Commission on their respective work. Ministers support a high level of innovation and ambition during the investigation phase, close monitoring of emerging trends, and the ability to react and adapt to changing demands, whilst recognizing the trade-off between designing an ambitious product and making fast progress.
Our next thematic discussion, in April 2022, will be on privacy considerations and how they square with other policy objectives, such as countering money laundering, illicit financing and tax evasion.
We will then turn to potential impacts of the digital euro on the financial system and the use of cash, in June 2022.
Then, in the latter half of the year, we will discuss the broader ecosystem around the digital euro and the role and business models of the various public and private actors in this ecosystem, which in turn could have implications for efficiency, competition, innovation and the inclusiveness of the digital euro.
We welcome the continued efforts of the ECB and the Commission in this process. The Eurogroup will continue to play an active role and to contribute with regular discussions on the digital euro** in line with the advancement of the Eurosystem investigation phase and the work by the ECB and the Commission.
- * Main content and course of discussions at the Eurogroup meeting held on 12 July 2021 in Brussels
- ** Eurogroup Work programme until July 2022
- Digital finance (background information)