The Next Phase of the Digital Euro Project
The European Central Bank (ECB) has announced that it is moving its digital euro project to the next phase, known as the “preparation phase.” This decision comes after two years of investigation and exploration into the design and distribution models for a digital euro. The preparation phase, which will begin on November 1, 2023, and initially last for two years, will involve finalizing the digital euro rulebook and selecting providers to develop a digital euro platform and infrastructure.
A Digital Euro for Everyone
The ECB envisions a digital euro that is accessible to all individuals and businesses. It will be provided by supervised intermediaries such as banks, ensuring wide accessibility. The ECB emphasizes data protection and privacy, stating that personal data will not be visible to the Eurosystem, and payment information will not be linked to individuals. The digital euro aims to achieve a level of privacy comparable to cash transactions.
Benefits of a Digital Euro
Fabio Panetta, an ECB Executive Board member, believes that a digital euro would enhance the efficiency of European payments and contribute to Europe’s strategic autonomy. ECB President Christine Lagarde highlights the need to prepare the currency for the future, envisioning a digital euro as a form of cash that can be used for all digital payments at no cost and with high privacy standards. Physical cash will continue to coexist alongside the digital euro.
Hot Take: A Milestone in the Digital Euro Journey
The ECB’s decision to move the digital euro project to the preparation phase marks an important milestone in the development of a central bank digital currency for Europe. With a focus on accessibility, data protection, and privacy, the digital euro aims to provide a secure and efficient payment method for individuals and businesses. As the ECB finalizes the rulebook and selects providers, the groundwork is being laid for a potential future issuance and roll-out of the digital euro. This move signifies Europe’s commitment to staying at the forefront of digital innovation in the financial sector.
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