Europe is on the verge of a new phase.. The digital euro. What are the benefits and concerns?
...by Abdalla Moustafa

  The meeting of the finance ministers of the eurozone countries, which are the countries that deal in the single European currency, concluded with a statement that can be considered an important document that puts a lot of points above the letters before the start of a new phase, which is the stage of the digital euro.
The ministers in the "Euro Group" have been keen to clarify matters since the start of the consultations phase between the countries of the unified bloc regarding the possible issuance of the digital euro in October 2021 in response to the leaders' call at the European summit.
The Eurogroup held a regular exchange of views on the main political dimensions of a digital euro, which will only come after further exploration and validation. The ministers had some remarks, and perhaps from the point of view of some observers, there were some conditions that were not obligatory, and that is why some considered them as “advice.” They said that in order to achieve success, the digital euro must be a joint and comprehensive European project, supported by the European public, and built on a solid democratic foundation. . The Ministers welcomed the participation of the European Central Bank and the European Commission in reporting to the Eurogroup and EU Member States on a regular basis to ensure thorough technical preparations for the Ministers' discussions.
The Eurogroup considered that the introduction of the digital euro, in addition to its main features and design options, requires political decisions that must be discussed and taken at the political level. The creation of a digital euro also requires an appropriate legal basis, including the European Parliament and the Council of the European Union based on a legislative proposal by the European Commission.
During the last meeting at the end of last week, the Eurogroup assessed the progress of the digital euro project. The ECB President presented the Design and Distribution Options recently endorsed by the ECB Governing Council and the Commission's Executive Vice President briefed them on their preparations towards a legislative proposal.
The Eurogroup reaffirms its support for the ongoing efforts of all European and national institutions involved in the preparations for the potential issuance of a digital euro, and encourages a high level of innovation and ambition in exploring possible design and distribution options.
The ministers said that depending on its design, the digital euro can play a major role in an increasingly digital economy by promoting the open strategic independence of the European Union, reflecting the central geopolitical role played by payment systems, in promoting financial sector innovation and providing benefits to citizens, companies and member states. , while preserving the central bank's money role as the anchor of the European monetary system.
The Eurogroup discussed several key issues related to the digital euro over the past year and provided views on the general objectives and policy dimensions of a digital euro, thus complementing the work undertaken by the European Central Bank and Commission. , while fully respecting the institutional roles and mandates of all involved actors. During the discussions of the members of the Eurogroup, several issues were raised, including
  The digital euro should supplement cash, not replace it, and should guarantee access to central bank funds for eurozone users in times of increased digitization of payments. The digital euro must be secure and resilient, guarantee a high level of privacy, be easy to use, convenient and widely available to the public, including in terms of costs for end users. He also called on ministers to consider the environmental implications of designing a digital euro. The Ministers concluded by saying that to succeed, the digital euro must guarantee and maintain the trust of users, where privacy is a fundamental dimension and a fundamental right. At the same time, Eurogroup also considered that the design of the digital euro must comply with other policy objectives such as preventing money laundering, illicit financing, tax evasion and ensuring compliance with sanctions. A risk-based approach could be taken to allow more privacy in the case of less risky transactions, which could ensure broader adoption of the digital euro among citizens with a stronger preference for privacy. Eurogroup is also supporting the exploration of offline functions that will serve a broader range of use cases and also contribute to financial inclusion by facilitating the use of citizens in different scenarios.
Everyone stressed that the digital euro should aim to protect the financial stability of the eurozone. Potential risks to financial stability should also be reduced, for example by imposing restrictions on the design of the digital euro, while maintaining its attractiveness as a means of payment. Further analysis and discussion of the criteria for these features should be based on a comprehensive quantitative analysis and their implementation should take into account the prevailing economic and financial environment. Also, the design and introduction of a digital euro must not weaken the capacity and independence of the European system of central banks in ensuring the transport of cash in order to fulfill its mandate of price stability. Finally, ensuring European access to a digital euro while stimulating innovation in the financial sector and integration with proprietary solutions must be a priority. The digital euro ecosystem must benefit from the strength and experience of participants from both the public and private sectors