Confirming its initial timetable, the ECB has published its first progress report on the preparatory phase of the digital euro. This project, launched on 1 November 2023, aims to lay the foundations for a possible issuance of a digital euro in October 2025.
Consistent confidentiality standards for the digital euro
The European Central Bank (ECB) seems to want to meet its deadlines by publishing its first progress report on the preparatory phase of the digital euro running from November 2023 to October 2025. The purpose of this press release is to present the progress made on key aspects of the design of the digital euro and to announce the next steps of the project.
In recent months, the ECB has approved the technical standards required for the digital euro, thus making it possible to provide “even higher levels of privacy than current digital payment solutions, while ensuring strong end-user protection against fraud “, in his words.
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The aim is to offer a ” level of confidentiality close to that of cash transactions “. Thus, the ECB announces that payment service providers will only access data necessary to comply with EU regulationssuch as those against money laundering.
The ECB will also be subject to supervision by independent data protection authorities to ensure its own compliance with the EU General Data Protection Regulation (GDPR).
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An offline digital euro and holding limits
The Eurosystem is also developing an offline functionality for the digital euro, allowing users to make payments without a connection after preloading their account. These transactions will take place directly between devices, without sharing personal information with payment service providers or other entities. The ECB is also studying the use of smart cards for these payments.
One of the ECB's major wishes is to design a digital euro that ” must enable widespread use while maintaining financial stability “. Deposits will not be remunerated and will be subject to ceilings. The ECB is currently identifying the factors which will influence these ceilings.
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The group responsible for developing the rules for the digital euro plans a updated version by the end of 2024, indicating that it wants to address user identification and authentication as well as infrastructure requirements. At the same time, the ECB launched 5 calls for applications for framework agreements with external service providers, in order to finalize the technical details.
To conclude this press release, Piero Cipollone also underlines: the importance of maintaining the debate on the legal framework, stating that the ECB wishes to continue consulting all stakeholders.
The digital euro is a joint European effort. As such, we will continue to engage with all stakeholders, including the European public, to ensure its success and benefit for all.
The Governing Council will only decide on the issuance of the digital euro once the legislation is adopted, with the final vote scheduled for October 2025.
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