The European Central Bank (ECB) has released its second progress report on the development of the digital euro, marking the halfway point of the preparatory phase. The report addresses key issues such as holding limits for the central bank digital currency (CBDC) and the harmonisation of laws to ensure universal standards. The Rulebook Development Group is leading efforts with seven workstreams involving market participants and central banks.
User preferences on holding limits are being studied, with a potential solution being a ‘reverse waterfall’ system that transfers excess digital euros to fiat in linked accounts. Offline transaction solutions are also under consideration, although specific details remain limited. Meanwhile, discussions continue over competition between European and non-European financial service providers, as well as the development of technical services such as wallets.
The ECB aims to improve user experience, offering cash-like privacy for those prioritising discretion. ECB executive board member Piero Cipollone previously assured that the digital euro would provide greater privacy than current commercial options. A final decision on the digital euro’s launch is expected in October 2025, with the next progress report due in mid-2025.
The proposed legislation aims to ensure that a digital euro would have legal tender status, be easily accessible to all individuals, offer basic services for free, protect privacy and data, and prevent money laundering and terrorist financing risks.
The European Central Bank (ECB) welcomes the proposal and supports the protection of the legal tender status of euro cash. “The legislative proposal is key to ensuring that the digital euro brings value to the people, taking the appreciated features of cash into the digital sphere”, said Executive Board member Fabio Panetta
The European Commission announced another round of consultation on the launch of digital euro, the EU’s central bank digital currency (CBDC). Consultations would aim on comments and considerations of payment industry specialists, e-money institutions and consumer associations, among others. The consultation period started on April 4 and will last until 14 June 2022.
The outcomes of the consultations will target evidence on the following issues:
Users expectations for a digital euro
Role in the EU’s retail payments, and impact on digital economy
Availability for retail use while continuing to safeguard the legal tender status of cash
Impact on the financial sector, and the financial stability
Application of anti-money laundering and counter terrorist financing (AML-CFT) rules
The privacy and data protection aspects
International payments with a digital euro
Participants can submit their response in an online questionnaire posted on an EU Commission website.
