The European Central Bank (ECB) recently disclosed significant progress in the journey toward a digital euro. In a comprehensive report, the Rulebook Development Group (RDG) shared crucial advancements, marking a substantial stride in the digital euro’s evolution.
This update, a follow-up to the June 2023 report, spotlights the completion of initial chapters within the digital euro rulebook. Aligned with approved legislative proposals and design decisions by the ECB’s Governing Council, this first draft encompasses functional and operational models, technical scheme requirements, and an adherence model outlining the rights and obligations of scheme members based on the draft legislation.
A notable aspect of this milestone is the collaborative effort among RDG members, representing diverse stakeholders such as consumers, retailers, and intermediaries. Their inclusive approach, amalgamating various perspectives, underscores the emphasis on crafting a well-rounded framework.
Currently undergoing an interim review, the rulebook draft invites stakeholders to scrutinize and contribute feedback, fostering a more comprehensive and adaptable regulatory structure. The RDG remains open to adjustments based on received feedback, aiming to fortify the framework’s resilience.
The ECB emphasizes the rulebook’s flexibility, ensuring its capability to accommodate future adjustments in line with the ongoing digital euro legislative process. As the preparation phase intensifies, additional sections on user experience requirements, branding and communication standards, certification processes, testing and approval procedures, internal rules, risk management, and interoperability and implementation specifications will be incorporated, according to the ECB statement.
However, the ECB has yet to finalize a decision regarding the launch of a digital euro. ECB President Christine Lagarde has been a vocal advocate for a European central bank digital currency (CBDC) while expressing reservations about private cryptocurrencies. Her stance reflects a cautious approach, emphasizing the need for thorough assessment and preparation.
Lagarde’s insights shed light on the timeline, suggesting that a digital euro pilot might require an additional two years before a definitive decision. She has also underscored that the introduction of a euro CBDC wouldn’t eliminate cash but aims to coexist harmoniously, offering user-friendliness, universality, and being cost-free as essential attributes for success.
The unveiling of the ECB’s draft rulebook signifies a pivotal step in the evolution of the digital euro, demonstrating a collaborative and adaptive approach toward establishing a robust framework. As stakeholders engage in this developmental phase, their input becomes instrumental in shaping a digital currency aligned with evolving financial landscapes while ensuring inclusivity and adaptability in its design and implementation.
