The European Union Is Examining Its Options For A Digital Euro

The European Union has examined several options and started market research in preparation for its digital euro. However, some initiatives require political backing.

The much-discussed digital euro, the European Union’s central bank’s currency, has received an update (CBDC).

On January 16, EU finance ministers discussed recent suggestions for the digital euro, following which the participants adopted a CBDC statement. They claimed that some design elements and decisions call for political endorsement.

Breaking News: EU finance ministers adopt statement on Digital Euro, taking control by stating that key features and design choices require political decisions. #DigitalEuro #EUFinance #economy #Fintech #Blockchain #Crypto” 

A little more insight into the group’s viewpoint on the digital euro is provided in the meeting report. Although cash payments are still significant in many nations in the region, the article points out that digital payments are growing more and more common.

CBDC will ensure public access to central bank money in the digital world, according to the report. CBDC would also increase independence from non-European payment solutions, as the EU sees it as a means of benefiting strategic autonomy.

The report confirms that ECB will not have information on the holdings, transaction history, or payment patterns of CBDC while emphasizing that the digital euro is not programmable money.

ECB Follows The Lead Of The EU

Additionally, the ECB posted a market research article on technical options for the digital euro. Here, they extended an invitation to market participants to participate in a market study to comprehend a design process for the CBDC better.

For the express aim of doing market research, Ir presented an outline for a future design for the digital euro. Consumers, and intermediaries, including financial institutions, the ECB, and regional central banks, are all participants in this system.

The consumer sends an onboarding request to intermediaries who capture data, perform KYC checks, and issue wallets. Intermediaries confirm wallet possession and make settlements, Digital euro components oversee the process.

BOE Governor Opposes CBDC

Around the world, CBDCs have become increasingly popular, particularly in Sweden, China, Japan, and India. Furthermore, not all central banks appear to share this belief.

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BOE Governor Andrew Bailey is evaluating the need for digital pound before embracing the technology.

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