The European Union was approaching the target date for implementing the much-anticipated legislation for a digital euro, initially scheduled for June 28th. However, the EU has decided to temporarily pause the bill, a decision that stemmed from a leaked draft revealing concerns related to privacy and technical issues for central bank digital currencies (CBDCs). Moreover, the leak contained a statement from finance ministers, casting doubt on the plan’s underlying motivation.
The draft bill was set to be released before the European Central Bank made a definite decision on the Digital Euro’s launch. Nevertheless, this timeline has changed multiple times. At one point, the bill was expected to be introduced in May, but the publication date was postponed to June’s end. What lies ahead remains uncertain since the bill’s release date has not been announced after these delays.
Finance ministers across the euro area discussed the plans during a meeting last week, emphasizing the need for a convincing and clear narrative on the Digital Euro’s added value. In particular, they were keen to understand the effects on the economy and the potential changes to EU citizens’ lives. Chaired by Irish Finance Minister Paschal Donohoe, the talks concluded with local institution ministers expressing interest in supporting the work but also wanting to explore possible alternatives.
According to reports, the leaked draft bill aimed to prohibit banks from offering interest on digital euros and to prevent merchants from imposing fees on its usage. Additionally, the proposal stated that the CBDC must be accessible for offline payments similar to cash upon issuance. The draft further dictated that users should not have the ability to program the digital currency to restrict subsequent use.
CoinDesk, which claims to have seen the leaked bill, shares that it read, “The digital euro shall be available for both online and offline digital euro payment transactions as of the first issuance of the digital euro.” The bill also added that the privacy level for offline, face-to-face use should be comparable to withdrawing money at an ATM.
With the bill currently on hold and no revised timeline in sight, the future of the digital euro remains uncertain. This development raises concerns about the Digital Euro’s role in the economy and its potential impact on everyday life for EU citizens. While the wait continues, the need to address privacy and technical issues associated with CBDCs becomes more apparent in order to ensure a successful launch of the digital euro in the future.
Source: Cryptonews
