Digital Euro Decision by ECB in 2023

The European Central Bank (ECB) has issued a second report detailing progress made during the investigation phase of its project to issue a digital version of the common European currency. This document defines the roles of the European Central Bank (ECB) and market participants within the digital euro ecosystem. It presents a set of design and distribution options recently endorsed by its Governing Council. A digital Euro, like paper Euros, would be a liability for the Eurosystem, the monetary authority of the Eurozone that includes the ECB and the national central banks of the member states. The regulator says the Eurosystem needs complete authority over creating and settling digital Euro transactions.

End users (consumers, merchants, and businesses) will receive digital Euros through supervised intermediaries like credit institutions and payment service providers, who will issue digital Euro wallets, process payments, and offer other services. They will also perform KYC and AML checks to prevent money laundering. In addition, the ECB stresses the following points:

Paying in digital euro should always be an option, irrespective of the entity with which end users open digital euro accounts or wallets and of their country of origin.

In addition, the European Central Bank has said that the digital euro's architecture will reduce the ECB's involvement in data processing. The monetary authority explained that:

“the Eurosystem would not be able to infer how much digital euro any individual end user holds nor to infer end users' payment patterns.”

In 2021, researchers began gathering information for the digital euro project. In September 2022, the ECB published its first status report. The distribution scheme's rules document is scheduled to be written in January. According to the announcement, the Governing Council of the central bank will review the research results in the fall of 2023 and decide whether to move into a realization phase.