The ECB is preparing a digital euro project. The design will be offered in October
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The European Central Bank is preparing a project for a digital version of the euro, responding to pressure from emerging technologies that could change the way money is used over the next ten years of the bank’s operations. “European Truth” writes about it with reference to the Associated Press.
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What is known
ECB President Christine Lagarde said that the digital euro can offer people a way to buy things that do not depend on payment service providers controlled by non-European companies. These may include Mastercard, Visa, Apple Pay and Google Pay.
The European Commission is expected to propose legislation on the idea within weeks, ECB officials say, while the central bank will publish a detailed proposal for the design of the digital currency in October.
Read: The ECB will start the development of the digital euro by the end of 2023
What about digital currencies in the world
Central banks around the world, including the US Federal Reserve, are cautiously studying digital currencies as cash increasingly gives way to electronic payments.
Some small countries, such as Nigeria, the Bahamas and Jamaica, have already introduced digital currencies, while China is making trial runs.
Central banks are also reacting to the emergence of cryptocurrencies, causing concern that one day people may turn to competing forms of digital money that will undermine national currencies.
A digital currency backed by a central bank would be a safe and stable means of payment — unlike volatile cryptocurrencies, whose price drops over the past year and the collapse of exchanges like FTX have sparked calls for regulation.
Background
In January 2021, the ECB completed public consultations on the digital euro. The majority of respondents named data privacy as the most important characteristic of CBDC.
In April 2021, the head of the ECB, Christine Lagarde, said that the European Union could issue its own CBDC in four years, if politicians approve the project.
As a reminder, analysts of the financial conglomerate Morgan Stanley estimated that about 8% of the deposit base of the EU banking system will be transferred to the digital euro.
Read also: The digital euro will protect user data better than private stablecoins — the ECB
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Source: Ministry of Finance
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