ECB moves to start digital euro project
|The European Central Bank (ECB) said it will move from discussion to exploration in its plans to develop a digital euro.
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The ECB decided to start the investigation phase of a euro-zone central bank digital currency (CBDC), which will last 24 months, an announcement Wednesday said.
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The ECB has been discussing the potential launch of a CBDC for the 19 euro countries since the beginning of this year. President Christine Lagarde said in March that one could be launched within four years.
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"We will commit the resources necessary to design a marketable product," ECB board member Fabio Panetta said in a blog post. "But a decision about whether or not to issue a digital euro will only come at a later stage. And in any event, a digital euro would complement cash, not replace it."
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Research by the central bank last year highlighted a drop in the usage of cash since 2019, with the COVID-19 pandemic attributable for an acceleration in the long-term decline.
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The ECB said prior experimentation suggested that an architecture "combining centralized and decentralized elements are possible."
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The move from discussion to exploration of a CBDC is one that numerous other central banks including those of the U.K. and Japan have made in the past year.
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Among major economies, China leads the way in its advancement of CBDC plans. South Korea and Sweden both appear to have moved from exploration to testing in recent months.
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