European Commission aims for universal acceptance with digital euro proposal

Digital Euro Proposal

On June 28th, the European Commission declared that they had put forward a legislative plan for a digital euro, hoping to make it a commonly accepted and easily accessible means of payment.

The announcement highlighted the fact that granting individuals the ability to procure digital euros through their banks on request guarantees convenient availability and stops people from being left behind. The proposition also includes clauses for free fundamental digital euro facilities, privacy defense and offline payments.

In a different plan, the commission proposed that banks, insurers, and funds should provide customer data to fintech companies in exchange for remuneration, with the aim of advancing digital finance. Under this plan, firms that possess customer data must immediately and consistently make it available to participating entities when customers request it, guaranteeing immediate access to the data.

The commission is attempting to break up the payments market, which is currently dominated by banks, Visa, and Mastercard, by introducing this measure. This is in response to the emergence of fintech companies providing alternative services. Moreover, the proposed legislation emphasizes user privacy and data safety, while also reducing the potential for money laundering and terrorist financing.

Data Act Regulations

The European Union has finalized regulations for a controversial “kill switch” for smart contracts under the Data Act.

The European Central Bank (ECB) expressed its approval of the commission’s plan to ensure cash remains a vital part of the payments system. It was in favor of the commission’s suggestion to protect the legal tender status of cash euros. Christine Lagarde, President of the ECB, declared:

By October 2023, the investigation phase of the project will be concluded, allowing the ECB to move on to the next step of further developing and testing the technical solutions and business arrangements.

The Governing Council will only make a decision to issue a digital euro after the legislative act has been adopted.

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