The EU’s central bank digital currency (CBDC) pilot project is moving to a new phase that will last two years. The European Central Bank (ECB) will develop rules for using the digital euro and also select potential issuers. The decision to issue a digital currency will be made once this phase is completed.
After a two-year study into the possibility of issuing the digital euro, the Governing Council of the European Central Bank (ECB) has announced that the CBDC pilot project is moving to a new stage.
Officials have stated that from November 1, 2023, ECB developers and analysts will start building a framework for the possible issuance of the digital euro. However, the press release also states that the transition to the new stage doesn’t necessarily indicate that the authorities have made a final decision on the CBDC issue. The new phase of the digital euro development is intended to be a preparatory stage and will be based on the data obtained from previous studies.
The preparatory phase will last two years and focus on the development of rules for using the digital currency and the selection of possible issuers. This phase won’t include tests and experiments. Its main purpose is to gather information on which the Governing Council will be able to decide on the feasibility of the future issuance of the digital euro. However, officials have emphasized that the final decision will be made only after the approval of the legislative framework for the CBDC use and after the official adoption of the initiative by the European Parliament.
The members of the European Commission insisted that the pilot project of the digital euro should take into account the political implications of the CBDC issue, and its design should be developed on the basis of regulatory requirements. In June this year, the European Commission proposed a legislative plan for the introduction of the digital euro, intending to make it a widespread and easily accessible form of payment. The Governing Council of the ECB has conducted relevant studies and reported on the potential design and distribution possibilities of the CBDC, taking into account the requirements of the European Commission.
