The European Central Bank (ECB) has recently advanced the digital euro project into its preparation phase, following a two-year investigation. The Governing Council, led by Christine Lagarde, has set the start date for this phase as November 1, 2023. The next two years will involve finalizing rules, selecting platform providers through European-supervised intermediaries, and conducting extensive testing.
The digital euro is designed to be a universally accessible digital cash alternative, offering high privacy standards and prioritizing data protection. It is intended to provide instant payment settlements and coexist with physical cash. The service will be free for basic use and is expected to facilitate transactions across the euro area, both online and offline.
Fabio Panetta, a member of the ECB's Executive Board, underscored the need for a digital euro in light of growing preferences for digital payments. He highlighted its potential to increase efficiency and contribute to Europe's strategic autonomy. The project aims to promote resilience and competition while considering its environmental footprint.
The European Commission has supported this initiative by releasing a related draft bill at the end of June. However, the digital euro project's advancement remains contingent on the European Union’s legislative process. A decision on whether to proceed with the project is expected within two years from the start of the preparation phase.
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