The executive body of the European Union is getting ready to present a proposal for a digital euro. The European Central Bank (ECB) must function under its drafted plan to control the usage of digital currency.
As of now, there are no specific limitations on transactions or ownership.
The ECB must choose the appropriate limit to ensure monetary stability. These limits do not halt digital euro transactions that don’t jeopardize stability and will be applied in the euro region.
The draft proposal suggests the idea of imposing limitations on the use of the digital euro as a store of value to ensure the transmission of monetary policy, the availability of credit, and financial stability.
The project will be covered during a meeting of the finance ministers from the eurozone in Luxembourg.
The draft plan also states that the digital euro would be recognized as legal money and necessary for acceptance, with exceptions for microenterprises and nonprofit organizations.
Adoption of the digital euro will not be necessary for specific transitory and justified situations, for personal or home activities, or if alternative means of payment have been agreed upon earlier.
It forbids Surcharges on debt repayments, and the digital euro would be exchangeable for euro banknotes and coins at face value.
The European Central Bank and the European Commission have stated that digital money will continue to exist with cash.
The European Central Bank (ECB) sees the digital euro as a method to address the rising demand for online payments while also strengthening the euro zone’s monetary autonomy.
The central bank’s Governing Council decides whether to proceed to the next stage, which may take three years to complete.