The European Commission is embracing digital transformation by introducing a legislative plan for a digital euro. The aim is to ensure that it becomes widely accepted and easily accessible.
The announcement, made on June 28, highlights the goal of allowing individuals to obtain digital euros through their banks. This is intended to prevent any citizen from being left out of this digital revolution.
The proposed legislation includes provisions for free access to essential digital euro services, as well as measures to protect privacy and enable offline transactions. Additionally, the commission suggests a unique proposal that would allow traditional financial institutions, such as banks, insurers, and funds, to share customer data with fintech companies. This is expected to promote the growth of digital finance.
Under this proposal, companies that possess customer data will be required to promptly and continuously share it with other participating firms, with the customer’s consent. This will ensure real-time access to the data.
The objective of this initiative is to challenge the dominance of banks, Visa, and Mastercard in the payments market, creating opportunities for fintech companies to compete with innovative services.
The proposed regulations give significant attention to user privacy, data protection, and risk management in relation to money laundering and terrorist financing. Christine Lagarde, President of the European Central Bank (ECB), has welcomed the proposal, reaffirming the continued importance of cash in the payments system.
Following the investigation phase, set to conclude in October 2023, the ECB will proceed with further development and testing. The final decision on issuing a digital euro will be made by the ECB’s Governing Council after the legislative act is adopted.
Compiled by Coinbold
