FRANKFURT, Germany—The European Central Bank (ECB) has moved to the next phase of the digital euro project: the preparation phase, the Governing Council for the bank reported.
According to the ECB, the decision follows the completion of the investigation phase launched by the Eurosystem in October 2021 to explore possible design and distribution models for a digital euro. Based on the findings from the phase, detailed in a report, the ECB said it has designed a digital euro that would be widely accessible to citizens and businesses through distribution by supervised intermediaries, such as banks.
“The design envisages the digital euro as a digital form of cash that could be used for all digital payments throughout the euro area,” the ECB said. “It would be widely accessible, free for basic use and available both online and offline. It would offer the highest level of privacy and allow users to settle payments instantly in central bank money. It could be used from person to person, at the point of sale, in e-commerce and in government transactions. No digital payment instrument offers all these features. The digital euro would fill that gap.”
The Next Phase
The next phase of the digital euro project – the preparation phase – will start Nov. 1 and will initially last two years. It will involve finalizing the digital euro rulebook and selecting providers that could develop a digital euro platform and infrastructure. It will also include testing and experimentation to develop a digital euro that meets both the Eurosystem’s requirements and user needs, for example in terms of user experience, privacy, financial inclusion and environmental footprint, the ECB said.
Continuing to ‘Engage’
“The ECB will continue to engage with the public and all stakeholders during this phase. After two years, the Governing Council will decide whether to move to the next stage of preparations, to pave the way for the possible future issuance and roll-out of a digital euro,” the bank said.
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