Digital Euro Project Promoted To New Phase

Key Points:

• ECB progresses to the preparation phase for its digital euro project.
• The digital euro is designed for accessibility, privacy, and universal use.
• The issuance decision depends on the EU legislative process.

The Governing Council of the European Central Bank (ECB) has taken a significant step in the development of a digital euro by moving to the preparation phase of the digital euro project.

ECB Advances Digital Euro Project to Next Phase

This decision follows the conclusion of the investigation phase of the digital euro project initiated by the Eurosystem in October 2021, which explored various design and distribution models for a digital euro. The findings from this phase, detailed in a recently published report, have paved the way for the design of a digital euro that emphasizes accessibility and versatility.

The digital euro will be available both online and offline, offering the highest level of privacy and enabling users to settle payments instantly in central bank currency. Its potential applications span person-to-person transactions, point-of-sale payments, e-commerce, and government transactions, making it a comprehensive digital payment solution.

The preparation phase of the digital euro project, commencing on November 1, 2023, and initially spanning two years, will focus on finalizing the digital euro rulebook and selecting suitable providers to develop the necessary platform and infrastructure.

Issuance Decision Hinges on EU Legislative Process

Testing and experimentation will also play a significant role in refining the digital euro to align with the Eurosystem’s requirements and user expectations, addressing factors like user experience, privacy, financial inclusion, and environmental impact. The ECB intends to maintain ongoing engagement with the public and stakeholders throughout this phase.

The envisioned digital euro is positioned as the digital equivalent of cash, suitable for all forms of digital transactions within the Eurozone. The plan is to make it readily accessible to citizens and businesses through regulated intermediaries, including banks.

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