Patsalides: Digital Euro needs trust, balance, implementation
Christodoulos Patsalides, Governor of the Central Bank of Cyprus, outlined the strategic importance of the digital euro, emphasizing the need for trust, balance, and effective implementation. He stated that the digital euro is on track to become a reality by 2029.
Digital Euro's legislative journey
The digital euro is on a well-defined trajectory to becoming a reality in 2029, with legislation expected in 2026.
The Council of the European Union agreed its general approach last December, envisioning the digital euro as complementary to cash, available both online and offline, and designed to strengthen Europe's strategic autonomy and payments' resilience.
Meanwhile, the European Parliament is debating over 1,400 compromise amendments to the European Commission's proposal, reflecting diverse positions on privacy, governance, legal tender, and distribution.
A previous draft report by rapporteur Mr. Fernando Navarette, tabled last November, was cautious, questioning online functionality and proposing a 'market test.'
However, a new draft is reportedly removing the proposal for online version conditionality.
The Cypriot Presidency stands ready to launch the trilogues later this semester, aiming for swift and constructive convergence among co-legislators.
Trust, balance, and implementation
The digital euro's success depends on trust, balance, and effective implementation.
Trust requires robust privacy, ensuring the ECB tracks no one and personal data is pseudonymised, alongside clarity that it complements cash and ensures mandatory acceptance for inclusion and resilience.
The 'balance' theme focuses on intermediation, where private distributors strengthen the market while safeguarding financial stability and monetary policy.
This involves protecting banks from deposit flight, fostering private innovation, and ensuring citizens control their money.
Implementation concerns sequencing, testing, and governance, with ongoing debate on whether details belong in primary legislation or secondary acts.
The goal is legal certainty and flexibility to adapt to evolving market and technological developments.
A digital bastion for Europe
Patsalides frames the digital euro as a crucial pillar for Europe's resilience and strategic autonomy in a turbulent global landscape.
He stresses that any delay weakens the Union, urging co-legislators to accelerate the debate and commit to the 2029 timeline.
The project's success ultimately hinges on building trust at home, which will naturally reinforce the euro's standing in the international arena.