Digital Euro
Digitalisation has spread to every corner of our lives and transformed the way payments are made. In this new era, the creation of a digital euro would guarantee that residents of the euro area can maintain free access to a simple, safe, trusted and universally accepted means of payment. A digital euro is another form of central bank money, similar to cash, accessible to all residents and firms, but issued in a digital form. The digital euro will not replace cash, but rather complement it by providing an alternative means of payment, including payment channels that cannot be reached by cash, as in e-commerce. Furthermore, the Eurosystem will continue to ensure that all residents have access to euro cash across the euro area. More information on the concept of the digital euro can be found here.
In October 2020, the European Central Bank (ECB) published a report on the digital euro where it examined the issuance of a central bank digital currency (CBDC). In July 2021, the Governing Council of the ECB decided to launch an investigation phase of a digital euro project. In October 2021 a two-year investigation phase was launched, and it was concluded in October 2023. The aim of this investigation phase was to analyse different digital euro designs and distribution models, as well as the impact that a digital euro might have on the market.
Following the conclusion of the investigation phase in October 2023, the ECB Governing Council decided to continue with the digital euro project and initiated the digital euro preparation phase on 1 November 2023 which will last for another two years. The preparation phase will include the finalization of the digital euro rulebook and will select providers that could develop a digital euro platform and infrastructure. Furthermore, such phase will incorporate experimentation and tests to develop a digital euro that meets the Eurosystem's requirements and users' needs.
In June 2023, the European Commission also published a legislative proposal on a digital euro and legal tender of euro cash. The proposed legislative text establishes a framework to facilitate the possible introduction of a digital euro and to make it widely usable and available throughout the euro area.