New digital euro will hold its own against U.S. dollar, says finance minister

Portugal’s minister of finance has said today that the future digital euro – which is now being discussed within the European Union (EU) – will enable the currency to assert itself internationally against the U.S. dollar, pledging that Portugal will play a part in its development.

“The digital euro is a key element, a very important instrument in establishing the euro internationally as a global currency and as a potential competitor to the dollar in terms of store of value and transactions,” said Joaquim Miranda Sarmento.

Speaking in Brussels after meeting with his EU counterparts at the Ecofin meeting, the minister noted that “there has been further progress regarding the architecture and governance” of the digital euro, following Parliament’s approval on Thursday of the start of negotiations between Parliament and the Council.

“We are always, as we strive to be in all areas of European policy, at the forefront of what we believe to be useful instruments both for European integration and for the competitiveness of our economy,” he said.

Yesterday, the European Parliament approved the start of negotiations with the Council of the EU on the creation of the digital euro – a new form of electronic money issued by the European Central Bank – following parliamentary criticism.

In a statement, the European Parliament reported the approval – by 416 votes in favour, 169 against and 22 abstentions – at the plenary session in the French city of Strasbourg, thereby allowing negotiations to begin between MEPs and member states on the proposal for the digital euro, which aims to “ensure secure payments and reduce dependence on suppliers outside the European Union”.

The green light for the next phase of the legislative process comes after MEPs on the European Parliament’s Committee on Economic and Monetary Affairs approved, two weeks ago, the regulation that will govern the future digital euro – the EU’s electronic currency and an alternative to Visa and Mastercard – describing it as a “historic day”.

This confirmation was necessary as, following the initial approval, the European Conservatives and Reformists and Patriots for Europe political groups had attempted to challenge the decision.

With the green light now confirmed, negotiations between European institutions are expected to begin shortly, with the Irish Council presidency participating on behalf of the member states.

Another measure included in the same legislative package – concerning the legal tender status of euro banknotes and coins – was not contested, meaning that negotiations on this text may also begin without a vote.

The proposal provides for the digital euro to function as a complement to physical cash and current electronic means of payment.

Source: LUSA

Natasha Donn

Journalist for the Portugal Resident.