In the statement of the Economic Ministers of the Eurozone (known as the Eurogroup) on January 16, this body emphasized the unprogrammability of the digital euro and stated that this digital currency should be able to be automatically and easily converted into traditional assets.
According to Valx and quoted by Cryptoslate, the Eurogroup emphasized that although the digital euro should always have the ability to automatically convert to fiat euros, it should not be programmable to prevent its holders from spending it for specific purposes or at specific times. be deprived
The way Euro Digital interacts and integrates with blockchain and DeFi protocols is likely to be of interest to the crypto community. Although the European Union has never confirmed that the euro digital currency will be built on a blockchain platform, there have been hints that it is considering decentralized solutions such as distributed ledgers (DLT).
Eurogroup’s take on the unprogrammability of the digital euro could mean that crypto developers will be forced to use alternatives such as stablecoins Euro Tether (EURT), Euro Statis (EURS) and Euro Coin Circle (EUROC) in the DeFi space. Because it is clear that smart contracts have been launched with the aim of making currencies “programmable”.
However, Eurogroup made a distinction between user-programmed payments (eg automatic payments monthly or at any desired time interval) and programming in a way that controls the flow of money. The former will be supported, but the latter will be discouraged.
The Eurogroup’s concerns about the programmability of the digital euro are one of the points it calls a “political” decision.
The Eurogroup stated that the design specifications require “political decisions that need to be discussed at the political level.” The group acknowledged that the proper design of this asset could strengthen the EU’s geopolitical position and improve the region’s strategic autonomy due to the importance of payment systems.
The group expressed several major concerns on the way to this goal: First, that the digital euro should be widely available, but instead of trying to replace cash, it should play a complementary role. Another thing is that Euro Digital should provide the possibility of monitoring criminal acts while being reliable and preserving privacy.
The statement noted that restrictions on the holding of this currency should be applied in order to protect the financial stability of the European Union, and the level of participation of the public and private sectors should be balanced. It also noted that the specific needs of the EU should be considered alongside interoperability with other CBDCs.
The creation of the digital euro requires the participation of several different EU organizations. The Eurogroup said that if a digital euro is created, the European Parliament and the European Council must create a legal basis for the asset. In addition, the European Commission should create a related legislative scheme.
Although the European Council published its statement today (January 17), the details of this statement are the result of discussions between Eurogroup members. The Eurogroup is an informal meeting that takes place between the ministers of economy and finance of the member countries of the Eurozone.
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