President of the Eurogroup Paschal Donohoe gave an update on the progress of the digital euro, following the Eurogroup meeting of 16 January 2023; and a Eurogroup statement on the digital euro has also been published.
Donohoe said the President of the European Central Bank (ECB) had informed the Eurogroup of the progress in narrowing down design choices for the digital euro. The Governing Council of the ECB is expected to decide by the autumn of this year whether to move to a realisation phase in this process, where technical solutions would be developed and tested.
This phase would take around three years and does not in itself represent or imply a decision on the possible issuance of the digital euro. The Vice-President of the Commission gave an update to the group on the preparatory work that is underway towards the publication of a legislative proposal that would give the digital euro a proper legal basis.
Donohoe said the Eurogroup had published a Eurogroup statement which summarises the main discussions on a digital euro.
The statement said the introduction of a digital euro as well as its main features and design choices requires "political decisions which should be discussed and taken at the political level." The creation of a digital euro would require "an appropriate legal basis, involving the European Parliament and the Council of the European Union based on a legislative proposal by the European Commission."
The Eurogroup reaffirmed its support for the continued efforts of all European and national institutions involved in the preparatory work for the potential issuance of a digital euro, and encouraged a high level of innovation and ambition in exploring its possible design and distribution options.
Depending on its design, a digital euro could play "a key role in an increasingly digitalised economy by strengthening the open strategic autonomy of the European Union, reflecting the central geopolitical role played by payment systems, in fostering financial sector innovation and delivering benefits for citizens, businesses, and Member States, while preserving the role of central bank money as an anchor for our monetary system."