European Central Bank Initiates Preparation Phase for Possible Digital Euro Project
Summary:
The European Central Bank (ECB) has disclosed the commencement of the "preparation phase" for the digital euro project following a detailed two-year investigation. Beginning on November 1, this groundwork process will focus on completing regulations, picking potential issuers, and conducting user trials. The decision to issue a digital euro is not final and will only be considered post the completion of the European Union's legislative process. The crypto community raised concerns about the potential use of a digital euro for controlling user payments following ECB President Christine Lagarde's remarks in a prank video.
The European Central Bank's (ECB) governing council has declared the initiation of a "preparation phase" for the project involving the digital euro following an extensive two-year probe. In a notification on October 18, the ECB stated it aims to "initiate the groundwork for a potential digital euro issuance" beginning on November 1, clarifying that a Central Bank Digital Currency's (CBDC) issuance isn't preordained. This proclamation followed the unveiling of a detailed 44-page report focusing on the projected design and distribution of a digital euro. The ECB refers to it as the 'preparation phase,' a two-year long span concentrating on finalizing regulations for the digital currency and identifying potential issuers. According to ECB officials, this phase will also incorporate "trials and experimentation", influenced by user input and specific requirements from the central bank. Post this two-year term, the governing council will contemplate moving onto the subsequent preparation stages, providing the groundwork for the possible issuance and implementation of the digital euro. ECB has emphasized that the initiation of the preparation phase doesn't signify a decision to issue a digital euro. This decision will only be evaluated following the completion of the legislative process in the European Union. In the announcement made by ECB, it was stated that they would begin to lay the foundation for the possible introduction of the digital euro by November 2023. It was also specified that a decision about issuing a digital euro will be taken at a later stage.
Earlier in June, the European Commission suggested legislative action for a digital euro, with the intention of having users access the CBDC through their banks. As an executive board member at ECB, Fabio Panetta restated his aim of having the digital euro accessible alongside cash, reflecting many similar privacy characteristics. Notably, the crypto space has been critical of ECB President Christine Lagarde for suggesting that a digital euro could be employed to control user payments, a statement she made in a prank video where she thought she was talking to Ukraine President Zelensky. The introduction of a digital euro is expected to attract the interest of both regulators and policymakers, who will be up for election for the European Parliament in June 2024.
Published At
10/18/2023 7:59:25 PM
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