A digital euro and the scope and effects of the legal tender status of banknotes and coins

Background:

At the request of the Spanish Presidency of the Council of the EU, the European Economic and Social Committee (EESC) prepared an exploratory opinion regarding the digital euro and the legal tender status of euro banknotes and coins. The EESC considers that the success of the digital euro project will depend largely on it providing concrete added value for citizens and economic agents.

The Committee's opinion comes at a pivotal moment as Europe enters a new era of digitalization and monetary evolution. In October 2021, the European Central Bank (ECB) Governing Council embarked on the investigation phase of a digital euro, slated to span approximately two years. A significant decision is expected in the autumn of 2023, marking the transition to the next phase.

Key points:

In the opinion, the EESC considers that:

• the digital euro's success hinges on delivering tangible benefits, including security, confidence, widespread adoption, and easy, cost-free access for both citizens and economic entities. Also, the digital euro's legal tender status, ensuring broad acceptance, calls for a well-defined European legal framework capable of accommodating exceptional exemptions for specific payees and fostering uniformity in practices and standards across Member States;
• EU institutions should clearly define potential use cases and design features for the digital euro, conduct continuous research on its impact on finance and society, and foster public debate on its merits and drawbacks. This approach will help secure widespread acceptance;  
• ensuring that the digital euro's introduction doesn't jeopardize financial stability, lending potential, or credit institutions' funding is of utmost importance. The EESC stresses the integral role of the digital euro in advancing the Banking Union and calls for a competitiveness check to confirm its alignment with its objectives and its positive impact on citizens, businesses, job creation, and working conditions;

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Additional information:

- EESC section: Economic and Monetary Union and Economic and Social Cohesion (ECO)
- opinion type: Exploratory Opinion
- rapporteur: Antonio GARCÍA DEL RIEGO (Employers - GR I / Spain)
- co-rapporteur: Stefano PALMIERI (Workers - GR II/Italy)
- reference: ECO/616-EESC-2023
- referral: N/A
- date of adoption by section: 8/09/2023
- date of adoption in plenary: 20-21/09/2023

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