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Digital Euro Gains Support From Netherland’s Queen Máxima

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The work the European Central Bank has accomplished in its efforts to introduce a digital euro has been commended by Queen Maxima of the Netherlands.

On 7 November 2022, the queen gave a virtual speech at a European Commission conference with the theme “Towards a legislative framework enabling a digital euro for citizens and for businesses.” She claimed that by removing barriers like transaction fees and paperwork requirements, a digital euro could promote financial inclusion among underserved communities. A central bank digital currency, or CBDC, in the European Union might help lower the cost of transfers, but it might need protections and legislative changes “to address difficulties and risks,” the report claims.

The Queen stated,

“Public sector representatives have a duty to ensure that the financial system is open, inclusive, and responsive to the needs of all groups. So let us envision that better future and build a digital euro that works for all Europeans.”

Since becoming queen consort of the Netherlands in 2013, Máxima has occasionally used her platform to promote financial technology as a tool for inclusion, highlighting CBDCs in particular. Since 1814, the Netherlands has been governed by a constitutional monarchy, with the monarch, in this case King Willem-Alexander, serving mostly as a ceremonial head of state. Additionally, Queen Maxima represents inclusive finance for development as a special champion for the UN secretary-general.

The Bitcoin Amsterdam conference, which took place in the Netherlands in October, attracted other dignitaries like Prince Philip of Serbia and policymakers like former European Parliament member Nigel Farage. Following regulatory approval from the Netherlands’ central bank in September, U.S.-based cryptocurrency exchange Coinbase also declared its entry into that country.

Digital Euro Legislation To Soon Be Proposed By EC

According to Christine Lagarde, president of the European Central Bank (ECB), legislation governing the digital Euro will shortly be released by the European Commission (EC). When Lagarde made these comments, she was speaking at a conference titled “Towards a Legislative Framework Enabling a Digital Euro for Citizens and Businesses.” She further stated,

“The timely adoption of a legal framework for the digital euro would give all stakeholders the necessary legal certainty to prepare for its possible introduction and send a strong signal of political support… I’m very much looking forward to the legislative proposal for establishing a digital Euro, which the European Commission will propose shortly.” 

The ECB Governing Council said in July 2021 that it will look into the initiative in order to address the major problems with the creation and distribution of a European CBDC. In order to protect privacy and minimize risks for European residents, intermediaries, and the economy, it is considering different design choices.

Here’s how cryptocurrency fraud will be curbed by council of Europe

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In a report released Wednesday, the Council of Europe’s Moneyval committee urged European countries to crack down on cryptocurrency-enabled money laundering.

Moneyval, which checks compliance with dirty-money regulations in smaller European countries, has warned of the dangers posed by decentralized finance, privacy coins, and what it claims is market manipulation of big cryptocurrencies. In a preface to the report, Moneyval Chair Elzbieta Frankow-Jaskiewicz stated that the research extends beyond drug trafficking to topics such as fraud, corruption, and tax evasion. She further added,

“It is well known that money launderers have been abusing cryptocurrencies from their inception a decade ago. Methods are becoming ever more sophisticated, and larger in scale.”

The advisory group joined standard-setters such as the Financial Action Task Force (FATF) in advocating for a more stringent approach to cryptocurrency. Some in the sector have cautioned that controversial FATF requirements to recognize cryptocurrency users and allow funds to be tracked, which are now being implemented in jurisdictions like the EU, could threaten privacy and innovation.

The rapid evolution of technology, which frequently stretches across numerous jurisdictions, presents a challenge to regulators, according to the research, which calls for increased regulation and supervision as well as improved coordination across national agencies. It added that a study anticipated later this year will look into bitcoin laundering tendencies.

Moneyval is in charge of overseeing the mainly smaller European jurisdictions that are not supervised by the FATF in Paris, such as fintech hotspots Malta, Gibraltar, and Estonia.

Could EU cryptocurrency laundering plans overwhelm authorities?

New European Union proposals to monitor crypto transactions using unhosted wallets could violate international money laundering authorities’ risk-based approach, according to an official from the bloc’s own banking body. The European Commission’s policymakers also cautioned that any decision to eliminate the 1,000-euro limit for detecting cryptocurrency payers must be supported by evidence.

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The debate rages on, with industry data claiming that only 0.15 percent of cryptocurrency transactions contain illegitimate addresses, according to Chainalysis. Some lawmakers, on the other hand, argue that it’s far too easy to split up a large digital payment into several smaller portions in order to get around any regulatory restrictions.

European commission hints at digital euro bill that will be out by early 2023

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The European Commission intends to launch a digital euro bill in 2023. The commission’s plans to introduce a bill are the most unambiguous indication yet that a digital euro might be implemented in the coming years. The ECB has been sending confusing signals regarding the future of a digital euro since last year.

An ECB official indicated in September, shortly before the start of the two-year research into a digital euro, that the initiative wouldn’t ensure the deployment of a digital currency. Later, Fabio Panetta, a European Central Bank’s executive board member, stated that a possible digital euro would ‘likely’ be legal tender.

Before becoming legislation, the European Commission will have to coordinate the bill with the governments and legislatures of the member states. The ECB is now conducting tests with the digital euro. By the end of 2023, the monetary authority intends to have a prototype for the CBDC.

To complete the project, an impact assessment will be conducted by the European Commission to determine if the digital euro has the potential to undermine the financial system. The governors of the eurozone will assess if it is worthwhile to mint a virtual currency, and the digital euro might be produced by 2025.

Why a digital euro?

For everyday payments, a digital euro would be a quick, simple, and safe option. It would promote the digitization of the European economy and aggressively promote retail payment innovation.

The European Central Bank (ECB) and the euro area’s national central banks examine the advantages and dangers to ensure that money continues to serve Europeans well.

“Our work aims to ensure that in the digital age citizens and firms continue to have access to the safest form of money, central bank money.”

Christine Lagarde, President of the ECB

A digital euro would ensure that citizens in the euro region have free access to a simple, generally acknowledged, safe, and trustworthy method of payment in this new era.

A digital euro would be a supplement to money rather than a substitute. The Eurosystem will continue to make it possible to obtain currency anywhere in the eurozone. It would provide you with more options for paying and make it easier to do so, increasing accessibility and inclusion.

European Commission’s decision to release a digital euro will pave the way to revolutionize the world of digital currencies.