ECB Spearheads Digital Euro Project: Eurogroup Outlines Priorities, Discusses User Privacy and Environmental Impact

European central bank (ecb) and the eurogroup, comprising finance ministers of countries within the european union using the common currency, have been spearheading the digital euro project. the eurogroup has held regular discussions on the topic, laying out priorities for the central bank digital currency (cbdc) should the ecb decide to press ahead with it. the issuance of a digital euro would depend on the outcome of eu legislation, with the ecb continuing to serve as “an anchor for our monetary system.”

Eurogroup discussions have been ongoing since the start of 2021, with the european commission intending to table a proposal in the first half of this year that will establish the digital euro and regulate its main features. the ecb is also in the process of running a prototyping exercise for the digital euro with five companies taking part, and have put out a call for industry players to take part in market research, with responses due in mid-february. the investigation phase is set to conclude in the autumn and a decision will then be made on whether to go ahead with making the project a reality.

Eurogroup has discussed a range of topics in relation to the digital euro, including user privacy and anti-crime measures, environmental impact, the potential for an offline function, programming payments to be fulfilled when certain conditions are met, and the need for the digital euro to complement rather than replace cash. the eurogroup has suggested that those performing “less risky transactions” should have more privacy, while the digital euro would offer both privacy and transparency. ultimately, the eurogroup believes the digital euro should ensure the ecb remains “an anchor for our monetary system”.

By Evey Lovelace

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