ECB Will Make A Decision Whether To Issue Digital Euro In The Second Half Of 2023

Key Points:

• The ECB has published a new report on progress investigating the possible launch of a digital euro.
• The report announced that it will continue to work on the issuance of a digital Euro.
• A decision will be made in the fall of 2023

The European Central Bank (ECB) has published a new report on the progress of its investigation into the possible launch of a digital euro. The research will continue next year with the regulator planning to make a decision whether to proceed to the realization of the project in the fall of 2023.

ECB to Develop Rules for Digital Euro Distribution Through Intermediaries. The eurozone’s central bank has released a second report on the advance of the investigation phase of its project to issue a digital version of the common European currency.

This report provides an update on the progress made in the digital euro project investigation over the past few months. It follows on from an earlier report published in September 2022 that presented the rationale for introducing the digital euro, including the first set of basic design options.

This report looks at the second set of design and distribution options for the digital euro. Specifically, the report describes the respective roles of Eurosystem and custodial intermediaries in the digital euro ecosystem, including the settlement of digital euro transactions (Section 1, “Design options”) and explains a diagram-based approach to the distribution model for the digital euro (Section 2, “Distribution Model”).

It was recently endorsed by its Board of Directors and defined the role of the ECB and market participants in the digital euro ecosystem.

Further, the European Central Bank assures that the design of the digital euro would minimize its involvement in the processing of user data.

“The Eurosystem would not be able to infer how much digital euro any individual end user holds nor to infer end users’ payment patterns,”

The monetary authority elaborated.

The investigation phase of the digital euro project was launched in 2021. The ECB issued its first progress report in September, 2022. Work on a rulebook for the distribution scheme should begin in January. The central bank’s Governing Council will review the results of the research in the fall of 2023 and decide whether to proceed to a realization phase, an announcement detailed.

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