Cryptocurrencies are gaining more and more strength. That is why the European Union is evaluating in a commission the project of the Digital Euro, the future official cryptocurrency of the EU. It will not only take into account the dangers, but also the innumerable advantages of minting a digital currency.
The European Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union stated that the cryptocurrency project will be evaluated for its impact on commercial matters. Financial experts will discuss the possibilities of it, such as international payments and the stability it could provide. They will also examine how to solve some uncertainties of the Digital Euro, such as hypothetical cases of money laundering and terrorist financing. The committee will accept responses and objections until June 14.
According to the European Commission, the points consulted were: users’ expectations of the Digital Euro, its role in the European digital economy, combining its implementation while safeguarding the use of physical money, its impact on the financial sector and financial stability, the implementation of anti-money laundering measures, data privacy, cryptocurrency protection and digital payments.
Mairead McGuiness, EC finance chief, recently stated that the EU’s intention is that the draft legislation will be presented in 2023. Should it satisfy Eurozone officials, it could be operational by 2025.
The main reason for the speedy adoption of cryptocurrencies is the rapid progress they enjoyed in 2021 in the face of the faltering of traditional currencies during the conflict in Ukraine.
The Digital Euro would be regulated by the European Central Bank. It is not a currency different from the physical euro coins and banknotes. It is a firm project in which different countries within the EU, such as France, have already tested it. Spain also experimented with the currency in mid-2021.
The Digital Euro would bring much more speed and security in payments. One of the main interests it arouses is its possibilities after catastrophes or war conflicts. Although, unlike traditional cryptocurrencies such as Bitcoin, it will be subject to state supervision. It remains to be seen what type of technology it will use.Outside the European Union, El Salvador has become a frontrunner in cryptocurrency projects. In September 2021, the Central American country presented a pharaonic project called Bitcoin City, financed with Bitcoin. On the other hand, Kenya, Thailand and mainly China have also shown their interest in cryptocurrencies.