The European Commission has put forward a proposal that sets out the legal framework and necessary elements of a digital form of the euro. In a press release announcing the plan, the governing body says that the aim is to create a digital currency that will eventually be “widely usable and available”, and which the European Central Bank (ECB) “may issue in the future as a complement to cash”.
The commission says that its plan was motivated by “the increasing digitalisation of the economy”. It believes that the digital euro will form a “solid basis” for banks to provide “innovative solutions to their clients”. In addition, “the wide availability and use of digital central bank money would also be important for the EU’s monetary sovereignty – particularly if other central banks around the world start developing digital currencies,” states the press release.
The proposal for a digital euro is one of two recently announced schemes that make up what the European Commission calls a “Single Currency Package”. The other proposal in the package aims to define what “legal tender” means in legislation in order to safeguard the acceptance of, and access to, euro cash.