Questions and answers on the Single Currency Package

Following the publication of the proposed new „Single Currency Package“ which – according to the Commission – consists of two separate pieces of proposed legislation to facilitate the introduction of a Digital EURO in the EU and ensure access to the digital currency EU-wide, if so intended, (please see EventID #21755 and EventID #21754 in this context), the European Commission (EC) has published a corresponding set of questions and answers (Q&As). In brief, the legislations will / would
– establish the regulatory framework for the introduction of a Digital EURO, thereby covering relevant issues in this context ranging from the process of creation of such EURO, to the distribution of such within and outside the EU, to the legal tender status of the currency, to obligations of payment service providers in relation to the introduction of the currency, to name a few; and
– establish rules for the engagement of EU payment services providers (PSPs) in the Digitial EURO, whose currencies are not the EURO and the competent authority of which also do not have the EURO and for the supervision of PSPs by respective competent authorities.
It shall be noted that the EC has also issued a draft proposal to define the legal tender status of EURO banknotes and coins which has not been previously specified in any regulation and which is necessary in connection with the introduction of a Digital EURO which would be interchangeable with coins and banknotes and thus also receive legal tender status.
The Q&As now provide information on the reasoning behind the issuance of the new package and the related draft proposal on legal tender status, the objectives the Commission seeks to achieve in this context, and the key content of the package.
The key questions contained in the document are noted below – as quoted; for all of them, please consult the original document:
– What is ‘legal tender‘ of euro banknotes and coins?
– What are the objectives of the proposal?
– How does the proposal contribute to financial inclusion?
– What would the digital euro be?
– What would the added value of a digital euro be compared to existing private digital payments solutions, such as cards and mobile payments?
– Who would issue the digital euro and when?
– What would the role of the private sector be?
– How would the digital euro impact the banking system?