ECB Digital Euro Progress Report: Key Points
- Preparation Phase Progress:
- The ECB’s digital euro preparation phase has been underway since November, with good progress reported by Piero Cipollone, ECB executive board member.
- Focus Areas:
- Privacy:
- Online transactions will offer higher privacy standards than current digital payment solutions, using pseudonymisation, hashing, and data encryption.
- Offline transactions will provide a “cash-like level of privacy,” with payment details only visible to the payer and payee.
- Offline Functionality:
- Investigation of technical tools for offline transactions is ongoing, focusing on account funding and fraud checks.
- Possession Caps:
- Digital euro holdings will not be remunerated and will be subject to holding limits to maintain financial stability and effective monetary policy transmission.
- Privacy:
- Stakeholder Engagement:
- The ECB will continue engaging with stakeholders, including the European public, to ensure the successful development of the digital euro.
- Technical Development:
- Identification of providers for the digital euro’s supporting platform and the establishment of a technology rulebook are in progress.
- Holding Limits Calibration:
- A workstream involving central banks and national authorities is identifying factors influencing holding limits.
- A dialogue and data collection exercise has started, with more engagements planned.
- Legislative Framework:
- Issuance of the digital euro will only proceed once relevant legislation is adopted, which is essential for its functionality.
- Future Updates:
- Detailed information on holding limits will be provided closer to the issuance time.
- The ECB’s report emphasizes ongoing stakeholder engagement and legislative development for the digital euro.
