According to the European Commission’s Mairead McGuinness, money laundering checks will be in place for the EU’s possible digital euro, but they won’t be as stringent as those now envisaged for normal cryptocurrencies like bitcoin (BTC).
Private intermediaries such as banks would have a role in the implementation of a European central bank digital currency (CBDC), according to the Commission’s top financial services officer McGuinness.
Anti-money laundering measures will be included in the EU’s digital euro, which will be used for private cryptocurrencies.
EU Commissioners on Digital Euro Regulation
In a presentation to finance ministers yesterday, ECB officials suggested that, in reality, numerous types of wallets may be available to carry a digital euro with fewer inspections associated with lower-risk transfers.
According to the presentation, smaller payments might be completely offline and secret, similar to how currency is handled now.
Prior to making a judgment on this CBDC, McGuinness claimed new legislation would be drafted. The European Central Bank has previously hinted at the possibility of investigating CBDCs and how they can complement existing paper and coin currencies.
In order to evaluate whether the ECB should proceed with the development of the CBDC, the ECB is now reviewing its current policy.
Payment service providers like commercial banks will be the conduits via which the ECB’s currency is distributed if it is ever created.
Aside from making it easy for users to use the CBDC, this will help identify customers and distribute cash more efficiently.
For the time being, McGuinness stated that the ECB cannot make an official decision to issue until new legislation is passed into law.
Controlling and regulating the digital euro
Legislators in Europe recently enacted a contentious anti-money laundering (AML) rule that applies to Bitcoin transactions.
Even when dealing with a tiny quantity of bitcoin, users will be forced to produce ID under these new AML standards.
Wallets for storing digital euros have also been proposed lately by European finance ministers.
The danger associated with using these wallets will be greatly reduced due to the fact that they will need fewer verification methods.
Offline payments may also be made for smaller transactions between people who live near one another.
But the European Central Bank will wait until the new legislation is in place before making a judgment. If it is developed, the first quarter of 2023 will see the adoption of a plan for regulating a digital euro.