McGuinness believes that the digital euro plans should be overviewed by the new European Commission.
Mairead McGuinness, the European Commissioner for Financial Stability, Financial Services, and the Capital Markets Union, has urged the European Union to tread carefully on the central bank digital currency (CBDC) initiative, the digital euro.
McGuinness recommends that the next major steps for the project should be undertaken by the new European Commission, which will take office after the European Parliament elections in June 2024.
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While speaking at a recent event organized by Brussels-based think tank Bruegel, McGuinness indicated that the European Central Bank (ECB) is set to make a crucial decision about the digital euro this October.
However, during her speech, the commissioner emphasized the need for prudence:
Cash is less in use. We are using our cards and phones to buy, we’re doing e-commerce, and if there were a time when cash was very much diminished, then where do we have public money — the central bank public money — if it’s not in cash? We need a digital version of this.
Her comments come after the European Commission outlined a legislative plan for the digital euro in June. This proposed framework included stipulations for providing free essential services, offline payments, and robust privacy protections. It also indicated that traditional financial entities like banks and insurance companies would be required to exchange customer data with fintech firms for compensation.
In further developments, ECB's executive board member Fabio Panetta recently endorsed the Commission’s plan. In a discussion, Panetta termed the digital euro "a new paradigm for preserving monetary sovereignty."
The European Parliament elections are slated for June 6-9th, 2024.
As the European Union navigates the complex waters of launching its own digital currency, Mairead McGuinness advises a cautious approach.
