This could be an important step that could lead to the issuance of the digital euro in the Eurozone. The announcement would mark the beginning of the 24 months long investigation project
The central bank will develop a functional CBDC design while also addressing questions related to its impact on monetary policy, financial stability, and illicit activity. It will also evaluate necessary changes to the European Union legislative framework. Followed by the decision president of Euro group, Paschal Donohoe, joined the meeting expressed his full support to the decision.
“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”, says ECB President Christine Lagarde. “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”.
Investigative Phase of Digital Euro
During the investigation phase, the Eurosystem will focus on a functional design according to users’ needs. The investigation phase will examine the use cases that a digital euro should provide as a matter of priority to meet its objective: A riskless, accessible, and efficient form of digital central bank money.
The press release also clarified that the digital euro would complement the cash and not replace it. “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”, says ECB Board Member Fabio Panetta, Chair of the High-Level Task Force on a digital euro.
“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,” Lagarde said. The digital euro will have a substantial effect on European and global economies.
Central banks around the world have started considering CBDC plans. But, China leads the way as it has already started testing. UAE Central bank also announced its plan for CBDC development.