ECB Officials Transition to ‘Preparation Phase’ for Digital Euro Implementation

The European Central Bank (ECB) has moved forward with its digital euro project, officially entering the “preparation phase” after a thorough two-year investigation. The ECB’s governing council announced plans to lay the groundwork for the potential issuance of a digital euro, starting on November 1. However, they emphasized that the decision to issue a central bank digital currency (CBDC) was not yet confirmed, highlighting the need for a comprehensive evaluation process.

This preparatory phase, spanning two years, will concentrate on finalizing the digital currency’s regulations and selecting potential issuers. Additionally, it will involve rigorous testing and experimentation, aligning with user feedback and meeting the central bank’s requirements.

“The launch of the preparation phase is not a decision on whether to issue a digital euro. That decision will only be considered by the Governing Council once the European Union’s legislative process has been completed,” stated the ECB in their announcement.

In June, the European Commission proposed a legislative plan outlining the framework for a digital euro, envisioning user access through their banks. Fabio Panetta, an executive board member at the ECB, reiterated the goal of introducing a digital euro that coexists with physical cash, incorporating robust privacy features.

It’s worth noting that ECB President Christine Lagarde faced criticism from the crypto community after suggesting in a prank video that a digital euro could be used to monitor user payments. Despite such concerns, the ECB remains committed to its vision for a digital euro, which is likely to attract close scrutiny from regulators and policymakers, especially in the context of the European Parliament elections scheduled for June 2024. The introduction of a digital euro marks a pivotal step in the evolving landscape of digital currencies and financial systems within the European Union.

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