Status: Draft -- Not PublishedWill be live at 09/18/2023 15:00
IIF staff assessment of digital euro proposal
The IIF has published an assessment of the European Commission's June 2023 proposed legislative package for a digital euro, setting out the extent to which the proposal addresses concerns it has raised previously on behalf of IIF member firms in its June 2022 submission to the EC.
Across a range of areas, the staff assessment finds that the concerns are only partly addressed, namely:
- Need for comprehensive cost-benefit analysis before launch
- Maintaining financial stability and bank intermediation
- Economic and liability model challenges
- Privacy controls and data protection
- AML/CFT compliance costs and challenges
- Cybersecurity and operational resilience
In one area, the staff assessment finds that the concerns have not been addressed. This is around governance and conflicts of interest.
In summary, the digital euro proposal as framed poses a range of concerns for commercial banks and other PSPs. These include disintermediation risks, revenue pressures, operational costs, market share impacts, and data protection obligations. The effectiveness of proposed mitigation measures is still uncertain. Ongoing consultation with the industry will be crucial as the framework evolves.