On Monday, the European Parliament published a briefing ahead of a vote on whether to proceed with the technical implementation phase of a digital euro. While the report is broadly supportive of the preparatory work carried out by the European Central Bank (ECB), it is not a proponent of a digital euro itself. It casts doubts on the eventual launch of a central bank digital currency (CBDC), arguing that “when in doubt, [one should] abstain (but be prepared).”
The paper assesses the state of preparation for the possible launch of a digital euro, focusing on familiar aspects such as market impact, implications for banks, and privacy. It was prepared at the request of the ECON Committee, the group that will decide in October whether the ECB should move ahead with the next phase of implementation of a digital euro. However, this does not constitute a launch decision, which would involve another vote in the future.
To date, most ECB and banking association reports have been more or less supportive of the digital euro initiative, only expressing moderate concerns around issues such as disintermediation and remuneration. By contrast, the ECON Committee briefing reflects a much more critical view broadly missing in EU debates. Commerzbank showed a similar pushback in the early days.
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