Digital Euro Enters ‘Preparation Phase’ — ECB Says ‘Digital Euro Would Make Data Protection a Priority’

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The European Central Bank (ECB) has decided to move its digital euro project to the next phase after two years of investigation. The “preparation phase” of the digital euro will involve “finalizing the digital euro rulebook and selecting providers that could develop a digital euro platform and infrastructure.”

Digital Euro Proceeds to ‘Preparation Phase’

The Governing Council of the European Central Bank (ECB) decided Wednesday “to move to the next phase of the digital euro project: the preparation phase,” the ECB announced.

This decision followed the completion of the ECB’s central bank digital currency (CBDC) investigation phase which the Eurosystem launched in October 2021 “to explore possible design and distribution models for a digital euro,” the European Central Bank detailed. The ECB also published a report Wednesday detailing its findings from the investigation phase of the digital euro.

The ECB detailed:

The next phase of the digital euro project — the preparation phase – will start on 1 November 2023 and will initially last two years. It will involve finalizing the digital euro rulebook and selecting providers that could develop a digital euro platform and infrastructure.

“After two years, the Governing Council will decide whether to move to the next stage of preparations, to pave the way for the possible future issuance and roll-out of a digital euro,” the ECB noted.

“The Eurosystem envisions a digital euro that would be free for basic use for individuals,” the ECB continued, adding that it has designed a digital euro to be “widely accessible to citizens and businesses through distribution by supervised intermediaries, such as banks.”

Moreover, the ECB stated: “The digital euro would make data protection a priority. The Eurosystem would not be able to see users’ personal data or link payment information to individuals. The digital euro would also achieve a cash-like level of privacy for offline payments.”

Fabio Panetta, ECB Executive Board member and Chair of the High-Level Task Force on a digital euro, opined: “A digital euro would increase the efficiency of European payments and contribute to Europe’s strategic autonomy.”

ECB President Christine Lagarde commented:

We need to prepare our currency for the future. We envisage a digital euro as a digital form of cash that can be used for all digital payments, free of charge, and that meets the highest privacy standards. It would coexist alongside physical cash, which will always be available, leaving no one behind.

What do you think about the digital euro progressing to the next phase? Let us know in the comments section below.