Digital Euro Project Moves to ‘Preparation’ Phase

The European Central Bank (ECB)’s digital euro project is moving to a preparation phase, which could pave the way for a “potential future decision” to issue one.

Although a decision on whether to issue a central bank digital currency (CBDC) for retail use in the European Union was due at the end of the two-year investigation phase that kicked off in 2021, the ECB has faced mounting criticism over its plans, targeting privacy issues and even veering into conspiracy theories.

The ECB is now set to start its preparation phase in November – also set to last two years – to finalize a digital euro rulebook, select providers to develop a CBDC platform and conduct further testing.

After two years, the bank’s 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,” a Wednesday announcement said.

A report published on Wednesday based on findings from the investigation stage shows the ECB designed a digital euro that would be “widely accessible to citizens and businesses through distribution by supervised intermediaries, such as banks.”

The move to a preparation phase is not a decision to issue a digital euro, the bank said, adding that the decision “will only be considered by the Governing Council once the European Union’s legislative process has been completed.”

The European Commission in June published legislative proposals for a digital euro.