EU Puts Brakes on Legislation for Digital Euro – What’s Going On?
The European Union was nearing the originally scheduled date for implementing the legislation required for a digital euro, slated for June 28th, just over a week from today, June 20th.
However, with the deadline looming, the EU has opted to temporarily put the bill on hold.
The delay came after the draft bill was leaked, revealing that it covers certain privacy and technical issues for central bank digital currencies (CBDCs).
Furthermore, the leaked document included a statement from finance ministers, seemingly casting doubt on the underlying motivation of the plan.
What happened?
The bill was on the brink of being published, but recent uncertainties appear to have influenced the original timeline. The draft bill was intended to be released before the European Central Bank made a concrete decision regarding the launch of the Digital Euro.
However, this timeline has been revised on several occasions already.
In fact, at one stage, the bill was set to be introduced in May of this year. Yet, that schedule has long since been altered, with the ultimate publication date postponed to the end of June.
June 28 was the day the European Commission’s decision-making body would meet and discuss the bill, before proceeding with its expected publication.
The plan was announced last week, and many assumed that the time for changes to the timeline had passed.
The plans were also commonly discussed by finance ministers from across the euro area during one of the regular meetings that took place last Thursday.
At the time, ministers stressed how important it is to build a compelling, clear narrative regarding what would be the added value of this development.
Essentially, they were interested in how it would affect the economy, and what would change when it comes to the EU citizens’ lives, and alike.
Paschal Donohoe, the Irish Finance Minister, chaired the talks, and once they were over, he stated that ministers within the local institutions are interested in supporting this work.
However, they also want to know their options and whether it is possible to further develop this narrative.
What did the leaked draft bill propose?
Intriguingly, the legislative draft reportedly intended to prohibit banks from offering interest on digital euros and prevent merchants from imposing fees for its usage.
The proposal further stipulated that the CBDC must be available for offline payments akin to cash from its inception.
Meanwhile, the draft legislation dictated that users should not be able to program the digital currency to restrict its subsequent use.
According to CoinDesk, which claims to have seen the leaked bill, the bill said:
The digital euro shall be available for both online and offline digital euro payment transactions as of the first issuance of the digital euro.
It added that the privacy level for offline, face-to-face use should be comparable to withdrawing money at an ATM.
As it stands, the bill appears to be on hold, with its release date uncertain since no revised timeline has been announced at this point.
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