The imminent digital euro by the European Union (EU) is expected to face obstacles in non-euro member states, as highlighted in a review by the European Parliament’s Economic Governance and EMU Scrutiny Unit. This arises from the stipulation that for widespread acceptance within the EU, international agreements between the EU and third-countries will have to be put in place. Henceforth, this underlines the crucial role external agreements will play in the adoption of the digital euro across borders.
Erwin Voloder, head of policy at the European Blockchain Association, accentuates the importance of data sharing agreements between countries to tackle the complex issues surrounding Central Bank Digital Currency (CBDC) usage. He asserts the existence of unresolved legal queries concerning usage, wallets, and jurisdiction that hinder the future implementation of the digital euro. While there is generally a willingness within the EU towards the integration of a digital euro into the existing payment system, technical and legal snags cannot be overlooked.
The European Central Bank’s (ECB) announcement in 2021 to kick off the investigation phase of a digital euro project is seemingly taking center stage. The investigation, set to conclude in October, is key in addressing major components of the CBDC design and distribution within the bloc. And now, the world holds its breath in anticipation of the ECB’s decision – whether to proceed with the next stage of development and testing or not.
Banking norms and practices are rapidly evolving across the globe, as revealed by the growing list of countries and central banks who are either exploring or piloting their own digital currencies. Notable among these is the People’s Bank of China, leading the charge with test pilots involving over 200 million people. The roster of countries with fully launched CBDCs is expanding as well, which includes China, The Bahamas, Nigeria, Anguilla, Jamaica, and seven Eastern Caribbean countries.
On the contrary, the United States, one of the world’s largest economies, has no confirmed plans to introduce a national digital currency. Nonetheless, steps are being taken to advance on a wholesale (bank-to-bank) CBDC.
In the light of these developments, the introduction of a digital euro faces a paradox. While it promises a revolutionary wave of change, it is not devoid of potential logistical hurdles and legal ambiguities. Whether this digital tide will successfully surge across borders or be hampered by regional and international complexities, remains to be seen.
Source: Cryptonews
