The European Central Bank (ECB) is moving forward with its central bank digital currency (CBDC) plans. Today, the bank announced that its Governing Council had approved the investigation phase of the digital euro project.
Investigation Phase Scheduled For 24 Months
The ECB, which has been discussing the potential launch of the CBDC for years, will now move to the exploration stage. According to the announcement released by the bank, the investigation phase of the euro-zone CBDC would last for 24 months. This phase is aimed at addressing key issues in the design and the distribution of a CBDC. For this purpose, the ECB said it would consult with stakeholders ranging from banks to retailers. The ECB further noted that the digital Euro is aimed at complementing cash and not replacing it. The project is focused on making sure digital payments are still within the purview of central banks. This is to avoid leaving digital payments to the private sector. ECB President Christine Lagarde said,"Our work aims to ensure that in the digital age, citizens and firms continue to have access to the safest form of money, central bank money."Lagarde added that the CBDC would meet the needs of EU citizens and avoid making negative impacts on local financial stability and the ECB's monetary policy. Lagarde had previously said in an interview with Bloomberg that she expects the CBDC to launch within four years. According to Fabio Panetta, an ECB Executive Board member, experiments carried out so far show that the digital Euro would be environmentally friendly. He said that the energy usage would be negligible compared with the energy consumption and carbon footprints of cryptocurrencies like Bitcoin.