The eurozone’s monetary authority is preparing to create a central bank digital currency. The European Central Bank’s (ECB) Rulebook Development Group has been tasked with developing a collection of rules, standards, and procedures for digital euro payments. The committee has released a study on the proposed regulation, providing the public with an insight into the technical aspects of central bank digital currency design.
Representatives from industry advocacy groups and national central banks make up the development group. It began working on functional and operational models, high-level architecture and standards, and participants’ rights and obligations under proposed legislation in January 2023. The development committee as a whole is now reviewing the proposed rulebook. “Based on the feedback received as part of this process, the RDG will consider making adjustments to this first draft as required,” the European Central Bank (ECB) said in a statement.
Following the conclusion of the investigation phase in November 2023, the ECB entered the “preparation phase” for the digital euro. Preparations will last two years. During that period, the ECB will finalise guidelines, conduct trials, and solicit input. Concurrently, a legislative framework is being developed.
The RDG will focus on user experience, branding and communications, certification, testing and approval procedures, internal rules, risk management, interoperability, and implementation as draft law evolves. Various sources have given conflicting opinions to the initial draft legislation.In addition, the ECB has issued a request for applications to work on individual components of the digital euro. It seeks vendors for alias lookup, fraud and risk monitoring, app and software development, offline services, and secure payment exchange. No decision on the launch of a digital euro will be made until the ECB’s preparations are complete and the necessary legislation is passed.