ECB’s digital euro project to enter preparation phase from next month
The European Central Bank (ECB) is to embark on the “preparation phase” of its digital euro project.
ECB’s digital euro project to enter preparation phase
The phase will involve the identification and selection of providers for the digital euro’s supporting platform and underlying infrastructure, as well as the finalisation of the regulations and rulebook behind the technology. The ECB is expected to begin this endeavour on 1 November 2023, with the phase forecast to last for two years.
It will also see the ECB test and experiment with a digital euro to ensure that it meets the requirements of both the Eurosystem and the end user, with privacy, financial inclusion and the environmental footprint all cited as key areas of focus.
Depending on the outcome of this next phase, the ECB will decide whether or not to move to the next stage of preparations. And while this could include the full-scale issuance of a digital euro, the ECB stresses that as of now, “the preparation phase is not a decision on whether to issue a digital euro”.
It comes after the governing council completed the digital euro’s ‘investigation phase‘, which began in 2021 and explored possible designs and distribution models, elements it claims to now have successfully identified.
“We need to prepare our currency for the future,” comments ECB president, Christine Lagarde. “We envisage a digital euro as a digital form of cash that can be used for all digital payments, free of charge, and that meets the highest privacy standards. It would coexist alongside physical cash, which will always be available, leaving no one behind.”
When discussing the current state of the project with the Economic and Monetary Affairs Committee last month, Lagarde emphasised privacy was at the core of its design, while notably vowing to dispel the Big Brother-style conspiracy theories that currently surround the topic.
