This decision has been taken following the conclusion of the research phase that the Eurosystem began in October 2021 to analyze the design options and possible distribution models of a digital euro.
The Governing Council of European Central Bank (ECB) decided to advance the digital euro and move to the next phase of the digital euro project called “preparation phase”. This stage will begin next November 1st and will have a estimated duration of two years.
This decision was taken after the conclusion of the investigation phase that the Eurosystem began in October 2021 to analyze the design options and possible distribution models of a digital euro. Based on the results of this phase, which are detailed in the report published this Wednesday, the ECB designed a digital euro “that would be widely accessible for citizens and businesses through distribution through supervised intermediaries, such as credit institutions.
Digital euro: how it will work
“He digital euro It would be digital form of cash which could be used for all digital payments throughout the euro area. It would be widely accessible, free for basic use and available with or without an Internet connection. I would offer the maximum level of privacy and would allow users settle payments immediately in central bank money. It could be used in operations between individuals, at points of sale, in electronic commerce and with Public Administrations. No digital payment instrument offers all of these features. The digital euro would fill this gap,” they say from the Frankfurt-based organization.
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At this stage, the ECB will proceed to prepare the operating rules of the digital euro and the selection of vendors who could develop the central bank digital currency (CBDC) platform and infrastructure. You will also understand testing and experimentation to develop a digital euro that meets both Eurosystem requirements and user needs regarding, for example, user experience, privacy, financial inclusion and environmental footprint.
During the time of this preparation phase, the BCE will maintain contact with the public and with all interested parties and, after the planned two years, the Governing Council will decide whether to move to the next phase of preparations in order to make arrangements for the possible future issuance and introduction of a digital euro.
Digital Euro: what the “preparation” phase consists of
The ECB stressed that the beginning of the preparation phase “it is not a decision on the issuance of a digital euro”. “The Governing Council will not consider this decision until the European Union’s legislative process has been concluded. The ECB will take into account any adjustments to the design of a digital euro that may be necessary as a result of the legislative deliberations,” they added.
“We have to prepare our currency for the future”declared Christine Lagarde president of the ECB. According to the leader of the community supervisor, at the ECB “we think of the digital euro as a digital form of cash that can be used free of charge for all digital payments and that meets the strictest levels of privacy.” “It would coexist with physical money, which will always be available, leaving no one behind”he added.
“As citizens show an increasing preference for digital payments, we have to be prepared to issue a digital euro alongside cash. A digital euro would increase the efficiency of European payments and contribute to Europe’s strategic autonomy“he explained Fabio Panetta member of the Executive Board of the ECB and president of the High Level Working Group on a digital euro.
Source: Ambito
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