ECB Moves to Start Digital Euro Project

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.

  • The ECB decided to start the investigation phase of a euro-zone central bank digital currency (CBDC), an announcement Wednesday said.
  • The ECB has been discussing the potential launch of a central bank digital currency (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.
  • A digital euro would be a means to complement cash, not replace it, the ECB has stressed previously. 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.
  • 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 last year.
  • 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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