The Eurogroup of the European Council said on January 16 that any eventual digital euro cannot be programmable and must automatically convert to traditional assets.
The digital euro should not be programmable
The Eurogroup said that the digital euro “cannot be a programmable money”.
Although the digital euro must be automatically convertible to the traditional euro at any time, the asset cannot be programmable so that holders cannot spend it on certain purchases or at certain times.
This is likely to be of interest to crypto developers considering how a digital euro could be integrated with DeFi applications and exchanges. Although the EU never confirmed that the digital euro would be built on blockchain, it did suggest that decentralized solutions were being considered, including distributed ledger technology (DLT).
Cryptocurrency developers and their applications will certainly be able to accept the digital euro. However, the Eurogroup’s insistence on the lack of programmability means that those developers may prefer to continue using stablecoins based on blockchains such as Euro Tether (EURT), Stasis Euro (EURS) and Circle’s Euro Coin (EUROC) and the chains of building blocks. on, which are highly programmable via smart contracts.
The Eurogroup also distinguished between user-scheduled payments (presumably scheduled payments) and scheduling that could largely control the movement of the asset. The first would be supported, but the second would be prevented.
Design and features are “political” decisions
The Eurogroup’s concerns about programmability are one of many design points the collective described as “political” in its announcement today.
The Eurogroup said the features and design of the digital euro require “political decisions that need to be discussed and taken at the political level.” He suggested that the design of the asset could strengthen the position of the EU in geopolitics, enhancing its strategic autonomy and independence due to the importance of payment systems.
The group noted several concerns related to that goal, which need to be balanced. He noted that a digital euro should be widely available, but should complement cash rather than replace it. Furthermore, he noted that a digital euro should enable monitoring against crime and fraud while providing trust and privacy to users.
He noted that holding limits should be implemented to protect the financial stability of the EU and that public and private participation should be balanced. He further noted that the specific needs of the EU must be balanced with interoperability with other CBDCs.
The creation of a digital euro requires the involvement of several different EU organisations. The Eurogroup said that if a digital euro is to be created, the European Parliament and the European Council must create a legal basis for the asset. In addition, he said, the European Commission would need to create a legislative proposal.
Although the European Council released the statement today, the details are the result of discussions among members of the Eurogroup, an informal meeting group that includes eurozone finance ministers.
Currently, the digital euro is in the research stage. Reports from December suggest that the EU will decide in the fall of 2023 whether to issue a digital euro. The asset will be issued much later if the EU decides to proceed.
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