EU finance ministers take stock of digital euro; UK scepticism grows

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Taking stock of progress, the group maintains that a digital euro should complement, and not replace cash, should be safe and resilient, ensure a high level of privacy, be easy and convenient to use and widely accessible to the public, including in terms of costs for end-users. Ministers also called for considering the environmental implications of the digital euro design.Privacy is emphasised as a key dimension in the design, while at the same time complying with other policy objectives such as preventing money laundering, illicit financing, tax evasion, and ensuring sanctions compliance.

EU governors suggest a risk-based approach could be followed to allow for more privacy in the case of less risky transactions. The Eurogroup also supports the exploration of an offline functionality which would serve a wider range of use cases and also contribute to financial inclusion.Interoperability with other Central Bank Digital Currencies is also viewed as another touchstone, including for cross-currency transactions.

"This will also take into account the development of CBDCs by other jurisdictions, in order to reap the potential benefits of faster, cheaper and safer cross-border transactions," states the Eurogroup. "On the other end, the risks associated with the use of a digital euro outside the euro area must be mitigated and monitored."The tentative endorsement of the project across the Eurozone contrasts with a more phlegmatic take in the UK.

Last year a Committee of peers in the House of Lords concluded that there is no convincing case for the creation of a central bank digital currency in the UK. BofE governor Andrew Bailey recently questioned the need for a wholesale central bank digital currency (CBDC), and is