The European Central Bank (ECB) is progressing toward the preparation phase of the digital euro project, following a two-year investigation. The aim is to create a digital cash equivalent for transactions within the euro area that offers maximum privacy and instant payments in central bank money, as announced on Thursday.
The ECB's governing council will commence the two-year preparation phase from November 1, 2023. This stage will involve finalizing regulations, selecting service providers, and conducting extensive tests. Despite these steps, the ECB has emphasized that this does not guarantee the issuance of a digital euro. The final decision will be made following the completion of EU legislative procedures and may result in changes to the design of the digital euro based on legislative discussions.
ECB President Christine Lagarde has portrayed the digital euro as a future-ready, free-to-use currency that can coexist with physical cash while prioritizing data protection.
However, some reactions from the cryptocurrency community favor Bitcoin over a potential digital euro. Concerns have been raised about central bank influence and the programmability of Central Bank Digital Currencies (CBDCs). James Wallis, Ripple's Vice President, has advocated for CBDC adoption by promoting a user-friendly experience, enhanced security, financial inclusion, interoperability, clear regulations, and opportunities for innovation.
This development in the blockchain regulatory space is being closely monitored by various stakeholders, including freelance writer Aaron Feuerstein.
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