The European Commission will present, in the first half of 2023, a legislative proposal for the creation of the digital euro, the virtual form of the single currency, in order to avoid "errors" and safeguard cash as well, it was announced today.

"We need an open and democratic process where everyone can contribute to the discussion and this is why the Commission is working on a legislative proposal to underpin a potential digital euro, which will establish it at the level of law and regulate its essential aspects," the institution's Executive Vice President Valdis Dombrovskis announced in Brussels.

Speaking at the High Level Conference on the Digital Euro, organized by the European Commission and the European Central Bank (ECB), the head of the EU's "An economy that works for people" added that "once presented, which should be in the first half of 2023, the proposal will be negotiated by the European Parliament and the member states", the co-legislators.

"In the meantime, both the ECB and the Commission have been holding open consultations to gather views from all parties," Valdis Dombrovskis pointed out.

According to the official, "there are many things to consider.

"This is a momentous decision and we cannot afford to get it wrong. Issuing a digital currency will have profound and systemic consequences, it will affect banks, traders, businesses and all people who participate in financial markets and has the potential to change the functioning and stability of our financial system," Valdis Dombrovskis listed.

First of all, "traditional banks play a vital role as intermediaries," to avoid the "risks of money laundering and terrorist financing," he pointed out.

Speaking on the occasion, the institution's executive vice president pointed out that "the digital euro would complement cash, provide a public money alternative to private digital payment methods, and be a secure, instant and efficient digital payment method for everyone to use."

Still, it is certain that "the introduction of a digital euro would affect hundreds of millions of people every day," by having "implications for the way they handle money, make payments, and the degree of control they would feel in participating in the financial system."

"This is not a quick process and nor should it be," so "the ECB and the European Commission have been working together to examine the political, legal and technical issues arising from the possible introduction of a digital euro," Valdis Dombrovskis indicated.

The official stressed that "euro cash is not going to disappear," adding that "the Commission will therefore present a Regulation clarifying the legal status of euro cash" in order to ensure its availability in the future.

The creation of a digital euro has been under consideration by the central bank for several months, but the structure has not yet made any decision on the matter.

A digital euro would be an electronic form of the single currency that would be accessible to all citizens and businesses - just like euro banknotes, but in digital form - allowing, for example, daily payments to be made.

It would then function as a complement to the euro notes and coins without replacing them.

A digital currency is a money-like asset that is stored or exchanged through 'online' systems, and in the case of the euro would be managed by the central bank.

Adopted by 19 European Union member states, the euro has been in circulation for 20 years and is the world's second most widely used currency in global payments.(Lusa)