Brussels, 28 June 2023 – The European Commission released today its proposals for a Regulation on the establishment of the digital euro. The proposals seek to put in place the legal framework for the possible launch of a central bank digital currency in Europe, should the European Central Bank (ECB) approve it.
The European Association of Co-operative Banks (EACB) has closely followed the different steps of the digital euro investigation phase conducted by the ECB since October 2021. In its preliminary analysis, the EACB observed that the Commission’s proposal does not address the more political questions that the introduction of a digital euro raises, such as where to draw the line between the role of public institutions and that of the private sector in payments. Instead, it gives the ECB a rather broad mandate to develop the digital euro and make decisions on its design.
EACB members also ask for greater clarity on the amount of euros that can be held in the digital euro account or transferred between accounts. “Adequate holding and transaction limits are necessary safeguards to prevent the negative impact of a digital euro on financial institutions’ lending activities and liquidity, as well as the risk of crowding out existing and future commercial payment solutions”, Nina Schindler, EACB CEO pointed out. “Setting low thresholds in the legislation would prevent unintended deposit outflows to digital euro accounts and ensure that any potential changes to these provisions remain subject to democratic scrutiny”.
Taken alongside the Retail Investment Strategy that was released on 24 May and the proposal for a Regulation on Financial Data Access (FIDA), also released on 28 June, the Commission has put forward a set of proposals which together encroach into the commercial space of retail banks such as cooperative banks. Ms. Schindler, said “The intrusive nature of these various regulatory packages has the potential to draw already scarce resources away from serving the real needs of cooperative bank customers and members. This is where our traditional strengths lie, and our efforts should be”.
The EACB is fully committed to engaging in a constructive dialogue with co-legislators to address the concerns of cooperative banks and restore the balance between enabling the European economy and citizens to benefit from technological development and stifling the retail banking industry in its ability to develop sustainable business propositions for its customers.