Digital Euro Development To Begin In 2023, says the ECB

According to ECB board member Fabio Panetta, the European Central Bank may begin developing the digital euro, an electronic counterpart of banknotes and coins, by the end of next year.

Digital Euro Development To Begin In 2023, says the ECB

A senior official from the European Central Bank (ECB) indicated Monday that the European Union (EU) might issue a digital euro within four years, with peer-to-peer payments being among the first applications.

Because of worries about Russia’s war in Ukraine and the advent of private stablecoins like Facebook’s now-defunct libra, the deadline for the central bank digital currency (CBDC) has been moved back and forth.

The ECB feels that the surge in popularity of non-cash transactions and the spread of crypto-assets indicate a rising need for immediacy and digitalization.

“At the end of 2023 we could decide to start a realisation phase to develop and test the appropriate technical solutions and business arrangements necessary to provide a digital euro. This phase could take three years. If the official sector, central banks and supervised intermediaries, do not satisfy this demand, others will.”

-Panetta

The ECB stated that a digital euro would attempt to provide a payment method that is free, available for all digital payments, and accessible to everyone, everywhere, at a time when bank branch closures may be impacting vulnerable clients. A central bank’s digital money would serve as an instrument to complement the digital payments transformations that are now occurring.

The ECB began a two-year inquiry phase in October to look into topics such as which use cases to prioritize, though the bank has yet to determine if to issue a virtual euro in the first place. Panetta has stated that the implementation phase, which would begin late next year, may span three years.

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Jai Hamid

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