MEPs Express Worries about Potential Launch of Digital Euro
Lawmakers have expressed concerns about the European Central Bank’s ability to handle a digital currency following a recent outage of a continentwide payment system.
Members of the European Parliament (MEPs) raised issues regarding the ECB’s digital euro project after a malfunction in their payment system caused significant delays last month.
The breakdown in the Target 2 (T2) payment system in late February resulted in banks being unable to settle transactions for almost an entire day.
The problem was exacerbated by an initial misdiagnosis by ECB technicians.
Representatives from four of the eight groups in the European Union’s legislature expressed doubts about the bank’s capacity to deliver on the digital euro project, which aims to provide a new payment system accessible to all eurozone residents.
Markus Ferber of the European People’s Party critiqued the ECB’s credibility, questioning how they could manage a digital euro when they couldn’t maintain their day-to-day operations smoothly.
Green politician Rasmus Andresen emphasized the importance of restoring citizens’ trust to prevent the digital euro from failing.
Johan Van Overtveldt from the European Conservatives and Reformists Group urged the ECB to demonstrate its ability to maintain a secure financial infrastructure before proceeding with the digital euro.
This digital euro would serve as an electronic wallet guaranteed by the central bank, with the infrastructure provided by the same. Distribution would be handled by entities such as banks or wallet providers.
Jussi Saramo from The Left parliamentary group supported the digital euro concept but stressed the need for the ECB to enhance its systems.
MEPs’ comments came shortly after ECB president Christine Lagarde announced plans to move forward with the digital euro initiative by October of this year.
Lagarde highlighted the ECB’s commitment to accelerating the delivery of the digital euro, aiming for a launch by October 2025.
According to the ECB’s website, the digital euro would be a form of electronic cash available free of charge to all eurozone residents for digital payments.
The ECB clarified that the digital euro would not be a crypto-asset, as it would be backed and managed by the central institution, ensuring stability and reliability.
Bankers have expressed concerns about potential impacts on their operations and customer funds, while EU parliamentarians’ resistance poses a hurdle for the ECB in passing legislation for the digital euro.
The ECB aims to launch the project officially once legislation is in place, following the European Commission’s proposal in June 2023.
Reuters contributed to this report.
