The European Central Bank is urging urgent action on developing a digital euro, warning that the slow progress of a legislative process could leave Europe behind in the race to develop central bank digital currencies (CBDCs).
ECB’s digital euro project manager, Evelien Witlox, demanded faster progress as major players such as the UK and China are actively discussing their own digital currencies. Witlox spoke to Euronews saying that it is important for Europe to speed up as it doesn’t want to fall behind these competitors.
EU Faces Digital Payment Gaps as ECB Pushes for Digital Euro Progress
There was no EU-wide digital payment solution, and 13 of the 20 countries that comprise the eurozone did not have a national card scheme. These nations, however, are dependent upon Visa and Mastercard rather than banks. The European market remains fragmented, noted Witlox, with only non-European entities competing with solutions for much of the continent.
To close the gaps, the ECB launched a CBDC exploration project in October 2021. However the project has been delayed as the legislation process continues. The European Parliament and the Council of the European Union have to complete a legal framework for the digital euro to actually see the light of day. Almost 17 months after the European Commission first suggested the digital euro, this step has not been taken.
These delays worried Witlox, who said they could make Europe less able to finally develop the digital euro in a timely fashion. She highlights that the digital euro must be prepared “at the right pace”, and for the right reasons.
But Witlox is hopeful that Europe will retain its place in the global field of CBDCs. While there isn’t a specific timeline for when the digital euro will launch, she emphasized that while Europe is a leader in the CBDC space, its continued work will keep it at the forefront of innovation in the space.
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