European Central Bank (ECB) officials move to ‘preparation phase’ for digital euro

A digital euro may not be a certainty, but officials with the European Central Bank are moving to the next phase. The European Central Bank (ECB) announced that the “preparation phase” for the digital euro project will begin after a two-year investigation. The ECB stated in an Oct. 18 notice that it intends to “start laying the foundation for the possible issuance of a digital euro” on Nov. 1, but that the issuing of a central bank digital currency (CBDC) is not a foregone conclusion. The statement came after the publication of a 44-page research on the design and distribution of a future digital euro.

The ECB’s preparation phase will span two years and will focus on finalizing rules for the digital currency as well as identifying potential issuers. According to officials, the next phase would include “testing and experimentation” in response to customer feedback as well as central bank criteria.

A digital euro may be issued and rolled out in the future after two years, the European Central Bank (ECB) announced. A decision on the next steps will be made by the Governing Council after two years. “The start of the preparation phase does not represent a decision on whether or not to issue a digital euro.” The Governing Council will only consider that option after the European Union’s legislative procedure is concluded.”

The European Commission submitted a legislative plan for a digital euro in June, with the goal of allowing people to access the CBDC through their banks. The ECB’s executive board member Fabio Panetta restated his ambition of having a digital euro available alongside cash, with many of the same privacy characteristics.

Many in the crypto community chastised ECB President Christine Lagarde for saying in a parody film that she was speaking to Ukraine President Volodymyr Zelensky that a digital euro might be used to manage user payments. The introduction of any digital euro is expected to pique the interest of regulators and policymakers, who will be elected to the European Parliament in June 2024.

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