On Wednesday (October 18th) local time, the European Central Bank announced that the management committee has agreed to enter the preparatory stage for the digital euro, which will initially last for two years. During this period, the European Central Bank will complete its rulemaking and select suppliers to develop the platform and required infrastructure.
European Central Bank President Lagarde said, "We need to prepare for the future currency. The digital euro we envision is a digital form of cash that can be used for free for all digital payments and meets the highest privacy standards. It will coexist with physical cash, which will always be available and no one will be left behind
The European Central Bank emphasizes that entering the preparatory stage is not a decision on whether to issue digital euros.
As central banks around the world seek to add a digital alternative to cash, the European Central Bank is not the only central bank exploring virtual cash. Most central banks around the world are studying digital currencies, and a survey by the Bank for International Settlements shows that over half of them are conducting specific experiments or pilot work.
The European Central Bank launched the Digital Euro project in 2021 and has since studied various design features. Despite doubts, officials from the European Central Bank will continue to push forward, citing benefits such as universal acceptance of payments among the G20 and the absence of volatility that troubles cryptocurrencies.
The European Union is also developing a framework to provide a legal basis for virtual currencies and regulate their key elements, while leaving the final decision on whether to continue implementation to the European Central Bank.
There are still doubts about digital currencies. At the end of last month, a group of EU lawmakers urged the European Central Bank to postpone the next stage of its decision, stating that the added value of the plan to the public was still unclear and its implementation was uncertain.
Fabio Panetta, a member of the Executive Committee of the European Central Bank responsible for this work, countered that the next steps are only more preparatory work, rather than a final ruling on whether to initiate it.
German central bank governor Joachim Nagel said in an interview on Thursday that he expects the digital euro to be put into use in about five years.