The European Central Bank (ECB) has said it would first focus on enabling people to pay each other directly and buy things online with its new digital currency, the digital euro. The second development phase will add different ways of using digital currency later.
People will first use the digital euro to pay each other and buy things online before they can use it for other purposes, like buying stuff in physical stores or making government payments. On Feb 22, the publication of a document titled ‘Rollout approach for the digital euro’ stated this information.
Multiple use cases are required to address the variety of end-user needs and market gaps across [euro area (EA)] countries, responding to a landscape with diverse payment behaviors and preferences.
Introducing the digital euro in stages has many benefits. Gradually introducing it will make it easier for people to understand using it, resulting in a smoother payment process. It will also make implementing and rolling out easier across different countries.
Moreover, the head of the ECB, Christine Lagarde, talked about introducing a digital euro in Sep 2022. She explains that it should not have any restrictions.
The ECB urges regulation as risks grow for cryptocurrencies.
The ECB has expressed hesitation toward the use of cryptocurrencies. The bank is warning against premature cryptocurrency regulation until the full implementation of the MiCA law in 2024.
ECB’s Fabio Panetta: Cryptocurrency investment is taking to gambling and needs regulation. He believes that cryptocurrencies have no practical use for society or the economy.
ECB supervisors have advised banks in the EU to restrict their Bitcoin holdings until new global regulations become legally binding. They worry that Bitcoin problems could affect the banking sector, and the international rules are the (BCBS).
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The opinions expressed in this article should not consider personal advice for any individual or specific security or investment product, as it conveys general information.