The Eurogroup of the European Council said on the third of January. 16 that any ultimate digital EUR cannot be programmed and must be automatically convertible to traditional assets.
The digital EUR must not be programmable
The Eurogroup said that the digital euro “cannot be programmable money”.
Although the digital euro should be automatically convertible to the traditional euro at any time, the asset cannot be programmed so that its holders are prevented from spending it on certain purchases or at certain times.
This is potentially important to crypto developers who are considering how to integrate the digital euro with DeFi applications and exchanges. Although the EU has never confirmed that a digital euro will be built on a blockchain, it has suggested that decentralized solutions, including distributed ledger technology (DLT), are under consideration.
There is no doubt that crypto developers and their applications will be able to accept the digital euro. However, the Eurogroup’s insistence on not being able to program means that these developers may prefer to continue using blockchain-based stablecoins such as Euro Tether (EURT), Euro Stasis (EURS), Circle’s Euro Coin (EUROC), and the blockchains it created. . on , which can be highly programmed via smart contracts.
Eurogroup also distinguished between user-programmed payments (presumably scheduled payments) and programming that could widely control the movement of assets. The former will be supported, but the latter will be prevented.
Design and features are “political” decisions.
Eurogroup’s concerns about programmability are one of several design points the group called “political” in its announcement today.
The Eurogroup said that the features and design of the digital euro required “political decisions that need to be discussed and taken at the political level”. He suggested that designing the asset could strengthen the EU’s position in geopolitics – improving its strategic autonomy and autonomy given the importance of payment systems.
The team noted several concerns with this goal, which needed to be balanced. Note that the digital euro should be widely available but should supplement rather than replace cash. He also noted that a digital euro should allow for surveillance to fight crime and fraud while providing trust and privacy to users.
He noted that restrictive restrictions should be applied to protect the EU’s financial stability, and that public and private participation should be balanced. He further noted that the EU’s specific needs for interoperability with other CBDCs should be weighed.
Creating a digital euro requires the participation of many different EU organizations. The Eurogroup said that if a digital euro is to be created, the European Parliament and the European Council must establish a legal basis for the asset. Furthermore, the report said, the European Commission will need to draw up a legislative proposal.
Although the European Council published a statement today, the details resulted from discussions among members of the Eurogroup – an informal meeting group of eurozone finance ministers.
Currently, the digital euro is in the investigation phase. Reports from December indicated that the European Union would decide in the fall of 2023 whether or not to issue a digital euro. The asset will be released much later if the EU decides to move forward.