The European Central Bank (ECB) has announced that the Eurosystem has formally launched the Central Bank’s Digital Currency (CBDC) project to prepare for the “possible issuance of the digital euro”. The central bank once again took another chance to claim that its CBDC would be better than decentralized BTC.
ECB launches CBDC project
The Governing Council of the ECB has decided to launch the exploratory phase of the digital euro project, which is to last 24 months. In particular, the decision means that the bank will allocate the resources needed to design a marketable product, said Fabio Panetta, a member of the ECB’s board of directors, chairman of the digital euro working group, in blog.
“But the decision on whether or not to issue the digital euro will come later,” Panetta added.
ECB President Christine Lagarde noted that the decision was made nine months after the bank published its report on the digital euro. At the time, they “carried out an analysis, requested information from citizens and experts, and carried out several experiments with encouraging results.”
“All of this has led us to decide to move up a gear and launch a digital euro project. […] The aim of our work is to ensure that in the digital age, citizens and businesses continue to have access to the safest form of money. “
The two-year investigation phase will address key issues related to design and distribution, as the digital euro must meet both the needs of Europeans and help prevent illicit activities, while avoiding any adverse effects on financial stability and monetary policy.
During this phase of the investigation, the Eurosystem, which includes the ECB and the national central banks of the Member States whose currency is the euro, will focus on a possible functional design based on user needs, including target groups, prototyping and conceptual work.
There will be a Market Advisory Group to take into account the views of potential users and distributors on the digital euro, which will then be discussed by the Retail Payments Council.
The central bank did not miss the opportunity to criticize decentralized BTC, stating that the digital euro’s infrastructure would be environmentally friendly:
“Energy used to run tens of thousands of transactions per second [tps] is negligible compared to the energy consumption of cryptoactive devices such as BTC. “
The Eurosystem TARGET Instant Payment Settlement (TIPS) is capable of processing more than 40,000 tps and “experiments have also indicated that it is possible to combine centralized and decentralized elements. ”
“People want to protect their privacy. At the same time, however, we must ensure that there is no money laundering or terrorist financing, so we need to strike the right balance in every aspect, “Lagarde said.
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