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The European Commission has announced it is planning to propose a bill for a digital euro early in 2023.

The bill will serve as the legal foundation for the European Central Bank’s ongoing technical work on the virtual version of a euro banknote or coin. Providing reasoning for this step, ECB Executive Board member Fabio Panetta said: ‘If we don’t satisfy this demand, then others will do it’.

The ECB is currently carrying out in-house experiments with the digital euro and expects to start working on a prototype at the end of 2023. Eurozone governors will then decide whether minting a digital euro is worth the trouble. If they do, the virtual currency could be ready by 2025 — at the earliest. That timetable works fine for the EU’s legislative process. The bill will have to go through negotiations within EU capitals and Parliament before it can become law.

A public consultation is set to emerge from the EU’s executive arm in March 2022. The consultation won’t replicate the ECB’s call for comment from 2020, which found payment privacy was the top concern among respondents. The Commission’s questionnaire will instead focus on how the digital euro could be used, such as handling everyday payments.

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