The European Union’s executive arm offered its vision for a digital euro that would facilitate payments but not serve as an investment tool, according to Bloomberg.
The bloc proposed a legal framework Wednesday for a digital currency that would operate like a digital wallet, but is leaving most of the details up to the European Central Bank.
“By complementing cash, I have no doubt that a digital euro will bring advantages to citizens and businesses across the EU,” EU financial regulation chief Mairead McGuinness said in a statement. “But I am aware that it requires peoples’ trust and confidence.”
The digital euro would be available for payments even without an internet connection, with offline payments offering a similar level of privacy protection as cash transactions, according to the proposal by the European Commission.
Businesses in the euro-area would be required to accept the digital euro, except in limited circumstances for very small merchants, and basic services would be provided free to individuals. Digital euro accounts wouldn’t earn interest, the commission said.
The ECB believes a digital euro would respond to the increasing demand for electronic payments and strengthen the monetary sovereignty of the euro area. The central bank’s Governing Council will decide whether to move to the realization phase in the fall. Development could take around three years.
A complementary legislative proposal released Wednesday would guarantee the role of cash to ensure it remains widely accepted.
Separately, the commission proposed making banks, insurers and funds share customer data with fintechs in return for payment to spur the development of digital finance in the bloc.
Firms holding data would be obliged to share it upon request by a customer with companies that are members of the data-sharing programs without undue delay and in real time.