The European Central Bank (ECB) has stressed the need to speed up the further development of a digital euro amid the risk of falling too far behind in the race for central bank digital currencies (CBDCs), which many other countries have been moving toward.
In an interview with Euronews, Evelien Witlox, ECB project manager for the digital euro, voiced these concerns. Growth in competition from other countries, including the U.K. and China, is forging ahead with their own CBDC initiatives, she said. Europe must act quickly or it risks being left behind, Witlox said.
ECB Urges Faster Action on Digital Euro
There’s still a huge degree of fragmenting in the European market,’ she said. “But there are also the non-European ones, the ones that come closest to covering the whole of Europe, like the international payment players, Visa and Mastercard.” Thirteen of the 20 eurozone countries have no national card scheme in place, and the lack of a single European digital payment solution indicates there is much work to do.
In October 2021, the ECB kicked off its study into a digital euro. The project needs a finalised legal end though, something the European Parliament and Council are still working on. It’s been a slow legislative process state: nearly 17 months have passed since the European Commission’s proposal.
These delays could jeopardise the region’s capacity to deploy their digital euro when it becomes imperative, said Witlox. She stressed that we must continue at enough pace in this process so that the digital euro is where we will need it.
However, ECB seems confident that it would remain on top of the global CBDC landscape, but delay in the digital euro’s launch has given way to some concerns. However, Witlox pointed out that although others are moving ahead globally, Europe remains at the forefront of CBDC progress in Europe.
ECB officials’ call for urgency points to the stakes of the race: China is already piloting its digital yuan, and the U.K. is looking at its own ‘Britcoin.’ When the digital euro is eventually established, it is expected to help improve the financial stability of Europe, deepen European economic sovereignty in the payments space and ensure that citizens have a safe, state-backed and efficient digital currency.
Now, it is up to lawmakers to force the ECB’s push for progress. How fast Europe will act will determine whether it can keep the lead in the ever-changing landscape of the financial world.
