The ECB kicks off its digital euro project
(Kitco News) The European Central Bank (ECB) is launching the investigation phase of its digital euro project, citing declining use of cash.
This investigation phase is expected to take two years. The actual development of a digital euro will start only after this phase is completed.
“It has been nine months since we published our report on a digital euro. In that time, we have carried out further analysis, sought input from citizens and professionals, and conducted some experiments with encouraging results. All of this has led us to decide to move up a gear and start the digital euro project,” said ECB President Christine Lagarde on Wednesday. “Our work aims to ensure that in the digital age, citizens and firms continue to have access to the safest form of money, central bank money.”
The goal of the digital euro is to complement cash, not replace it, the ECB said.
“We will engage with the European Parliament and other European decision-makers and inform them regularly about our findings. Citizens, merchants and the payments industry will also be involved,” said ECB board member Fabio Panetta.
The central bank added that the development of the digital currency itself could take another three years after this phase is complete.
“We are entering the age of digital money. Much like commodity or representative money in the past, digital money is emerging in response to changes in society and technology,” Panetta said in a blog post on Wednesday. “We are increasingly buying digitally and online. The role of cash as a means of payment is declining.”
The investigation phase will include looking at functional designs and examining different use cases. The objective is to provide “a riskless, accessible, and efficient form of digital central bank money.”
The issue of privacy and the impact on markets will also be analyzed.