ECB Eyes Mid 2021 As Possible Digital Euro Project Launch
European authorities eye the middle of this year to decide on the development of a digital euro currency for the Eurozone. The European Central Bank and European Commission said in a joint statement on Tuesday that:
Such a project would answer key design and technical questions and provide the ECB with the necessary tools to stand ready to issue a digital euro if such a decision is taken.
The ECB and the European Commission services are jointly reviewing at [a] technical level a broad range of policy, legal and technical questions emerging from a possible introduction of a digital euro.
Recently ECB consulted the public for the digital euro in which participants marked privacy of payments as a top feature for potential digital euro (41% of replies), followed by security (17%). Following the conclusion of the public consultation and a period of preparatory work, the ECB will consider whether to start a digital euro project towards mid-2021.
If launched, the digital euro would be made accessible to all citizens and firms – like banknotes, but in a digital form.
Need for better payment infrastructure:
Modernize the bloc’s retail payment sector as cryptocurrencies and private payment networks gain popularity.
ECB has been looking for an alternate medium for a faster and secure payment system due to a significant decline in the use of cash in the euro area. Adding to the worries are increasing threats from private payment firms such as Libra (now Diem) and cryptocurrencies that if extensively used might pose risk to financial stability and consumer protection.
The new money form – digital euro – will sit alongside traditional cash, not replace it. It will offer consumers the efficiency of a digital payment instrument with the safety of central bank money.
