The European Central Bank (ECB) has published its first progress report on the digital euro, detailing key design features, high privacy standards, and ongoing developments to ensure financial stability.
Bollywood Fever: The European Central Bank (ECB) has released its inaugural progress report on the preparation phase of the digital euro, outlining significant design features and ongoing developments. The report underscores the ECB’s commitment to high privacy standards for both online and offline payments, striving to offer users a level of privacy comparable to cash transactions.
First Progress Report on the Digital Euro Preparation Phase
On Monday, the ECB published its “first progress report on the digital euro preparation phase.” This document provides an update on the development of critical design features aimed at ensuring user privacy and financial stability.
High Privacy Standards
One of the key aspects highlighted in the report is the emphasis on high privacy standards. The ECB aims to provide a cash-like level of privacy for payments made in physical shops and between individuals. The report elaborates that for offline payments, personal transaction details would be known only to the payer and the payee, and would not be shared with payment service providers, the Eurosystem, or any supporting service providers.
Financial Stability and Monetary Policy
The ECB is also focused on creating a methodology for setting digital euro holding limits to maintain financial stability and ensure effective monetary policy transmission. This process involves collaboration with national central banks and other stakeholders.
“Digital euro holdings of individuals would not be remunerated and would be subject to holding limits,” the ECB stated. The central bank is developing a calibration methodology to define these holding limits, which includes a comprehensive monetary and economic assessment.
Legislative and Technical Developments
In addition to privacy and holding limits, the ECB is providing technical input to ongoing legislative discussions. The central bank is also finalizing the digital euro rulebook, which is a comprehensive set of rules, standards, and procedures developed by the Eurosystem to standardize digital euro payments across the euro area.
The progress report marks a significant step forward in the ECB’s efforts to develop a digital euro that balances user privacy, financial stability, and effective monetary policy. As the ECB continues to refine the design and implementation of the digital euro, it aims to ensure that this new form of currency meets the needs of users while maintaining the integrity and stability of the financial system.
For further details, the full progress report can be accessed on the ECB’s official website. Read Here.
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