Featured Product

    ECB Announces Launch of Investigation Phase of Digital Euro Project

    July 14, 2021

    The Governing Council of the European Central Bank (ECB) decided to launch the investigation phase of a digital euro project. The investigation phase will last 24 months and aim to address key issues regarding design and distribution. A digital euro must be able to meet the needs of Europeans while helping to prevent illicit activities and avoiding any undesirable impact on financial stability and monetary policy. This will not prejudge any future decision on the possible issuance of a digital euro, which will come only later. In any event, a digital euro would complement cash, not replace it.

    During the investigation phase of this project, the Eurosystem will focus on a possible functional design that is based on user needs; this will involve focus groups, prototyping, and conceptual work. The investigation phase will examine the use cases that a digital euro should provide as a matter of priority to meet its objectives, including a riskless, accessible, and efficient form of digital central bank money. The project will also shed light on changes that might be needed for the EU legislative framework and that will be discussed with, and decided by, the European co-legislators. ECB will continue to engage with the European Parliament and other European policymakers throughout the investigation phase. The technical work on the digital euro with the European Commission (EC) will also be intensified. Finally, the investigation phase will assess the possible impact of a digital euro on the market, identifying the design options to ensure privacy and avoid risks for euro area citizens, intermediaries, and the overall economy. It will also define a business model for supervised intermediaries within the digital euro ecosystem. A market advisory group will consider the prospective of users and distributors of a digital euro during the investigation phase. These views will also be discussed by the Euro Retail Payments Board.

    The investigation phase will benefit from the experimentation work done by ECB and the euro area national central banks over the past nine months, which involved participants from academia and the private sector. Experiments were conducted in four areas:  the digital euro ledger, privacy and anti-money laundering, limits on digital euro in circulation, and end-user access while not connected to the internet and facilitating inclusiveness with appropriate devices. No major technical obstacles were identified to any of the assessed design options. Both the Eurosystem TARGET Instant Payment Settlement and alternatives such as blockchain were proven capable of processing more than 40,000 transactions per second. The experiments also suggested that architectures combining centralized and decentralized elements are possible. According to these experiments, a digital euro core infrastructure would be environmentally friendly for the architectures that were tested; the power used to run tens of thousands of transactions per second is negligible compared with the energy consumption of cryptoassets such as bitcoin. These practical findings will provide useful input for the investigation phase.

     

    Related Links

    Keywords: Europe, EU, Banking, Digital Euro, Cyber Risk, Digital Currencies, CBDC, Environmental Risk, Suptech, ECB

    Related Articles
    News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699