A document suggesting that traders in the eurozone could be forced to accept a digital euro as legal tender will be presented to finance ministers on Monday. If the CBDC is given the same status as banknotes and coins, the payments would legally comply with payment obligations and their acceptance would be obligated at their full face value. According to CoinDesk , this would mean that merchants would have a legal obligation to accept payments in digital euros, increasing their network effects and potentially affecting their distribution..
The document, drafted by the Eurogroup secretariat, which brings together the finance ministers of the 20 nations of the monetary zone, asks ministers to consider whether exemptions should be established to ensure proportional application that balances the principles of contractual freedom and mandatory acceptance.
In a previous discussion in January, ministers agreed that the digital euro should not be programmable, as allowing limitations on how the recipient can use a given payment would affect the fungible status of the money. However, the European Central Bank is set to formally decide whether to issue its currency in digital format in the fall, and officials are working on technical details such as which potential uses to prioritize..
EU national governments will be involved in agreeing any legislation necessary to support the CBDC. Last week, the European Commission's Mairead McGuinness confirmed that a bill to be introduced shortly, alongside legal tender status, will examine anti-money laundering rules and compensation for those distributing the currency .
Digital euro as legal currency
If the digital euro becomes legal tender, this could have major implications for merchants in the eurozone. By having a legal obligation to accept payments in digital euros, merchants could experience an increase in network effects, which could potentially affect their distribution. Furthermore, if exemptions are established to ensure proportional application, this could balance the principles of contractual freedom and mandatory acceptance..
Although ministers previously agreed that the digital euro should not be programmable, the European Central Bank is working on technical details to determine which potential uses to prioritize should it decide to issue its currency in digital format in the fall. EU national governments will also be involved in agreeing any legislation needed to support the CBDC, which will include examining anti-money laundering rules and compensation for those distributing the currency.
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