Embracing digital transformation, the European Commission has put forward a legislative plan for a digital euro, with the objective of mainstream acceptance and easy accessibility.
The announcement, made on June 28, laid stress on the ability of individuals to secure digital euros via their banks, preventing any citizen from being excluded from this digital revolution.
The proposed legislation includes free access to fundamental digital euro services, safeguarding privacy, and provisions for offline transactions. Alongside, the commission suggested a unique proposal where traditional financial institutions such as banks, insurers, and funds could exchange customer data with fintech firms, thus fostering the growth of digital finance.
According to this proposal, companies possessing customer data will have to share it promptly and continuously with other participating firms upon customer consent, ensuring real-time access to the data.
This initiative aims to challenge the dominance of banks, Visa, and Mastercard in the payments market, providing room for fintech companies with innovative services to compete.
The proposed regulations have a keen focus on user privacy, data protection, and risk minimization in terms of money laundering and terrorist financing. Christine Lagarde, President of the European Central Bank (ECB), has welcomed the proposal, emphasizing the continued importance of cash in the payments system.
Following the investigation phase due to conclude in October 2023, the ECB will advance to further development and testing. The ECB’s Governing Council will only decide on the issuance of a digital euro after the legislative act sees adoption.
