While many states and central banks are moving towards the creation of their own CBDCs, the European Central Bank (ECB) has officially confirmed the start of its preparatory phase for the establishment of the digital euro.
Table of Contents
ECB prepares to launch digital euro
Two years after conducting a study on the advantages and distribution methods of the digital euro, the ECB is starting the preparatory phase for this new form of currency for the euro zone.
This phase will begin on November 1, 2023, for an initial period of two years. During this period, the ECB draw up regulations for the digital euro and select appropriate technology partners for its infrastructure. Particular emphasis will be placed on comprehensive testing, encompassing regulation, user experience, privacy, financial inclusion and environmental impact.
According to the ECB, the digital euro will be accessible to citizens and businesses via regulated financial institutions such as banks. It will serve as a digital alternative to paper or structural money, facilitating a multitude of online and offline transactions.
Efforts will be made to ensure access to the digital euro even for those without a bank account or digital device, notably via cards issued by public entities.
The ECB commits to the Digital Euro, confidentiality and efficiency at the heart of the Project
Christine Lagarde, President of the ECB emphasized the importance of protecting privacy in this project. She also assured us that the Eurosystem will not have access to users’ personal data and that transaction details will remain anonymous.
Access to the digital euro will be via dedicated applications, provided either by payment service providers, or directly via Eurosystem. Its use will be free of charge for individuals. In addition, a financial model will be set up to promote its distribution while protecting vendors from excessive fees.
It should be noted that the preparatory phase soon to be launched does not guarantee the issue of a digital euro. The final decision will depend on the European Union’s legislative procedures.. Any necessary changes will be incorporated in the light of legislative feedback.
In many countries, including United States or China privacy issues related to CBDC arise. If the European Central Bank takes these considerations into account, it would mark a positive step forward, heralding a favorable reception for the digital euro.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.