Digital Euro expected to come by 2026, potentially designed with a person-to-person payment solution: ECB official

Fabio Panetta

, a member of the Executive Board of the

European Central Bank

(

ECB

), confirmed in his speech at the National College of Ireland in Dublin on May 16 that a

digital

euro could come by 2026.

The digital euro will be potentially designed with a person-to-person payment solution. Panetta said that the ECB launched a two-year investigation phase in October 2021 to define the design features of a digital euro.

However, only by the end of 2023, the ECB will be able to start a realization phase to develop and test the appropriate technical solutions and business arrangements required for a digital euro. This phase can take up to 3 more years.

Panetta shed light on the current scenario, and elucidated the reasons and advantages for developing a digital euro:

* He gave the following reasons to bring a digital euro:

-

Cryptos

are free from public control and extremely risky and not trustworthy to be used as means of payment. They are speculative assets, surrounded by many public policy and financial stability concerns.

- Even the stablecoins are not risk-free and are vulnerable to bank runs.

* Panetta highlighted the following benefits of a digital euro:

- The central bank-backed digital money would create an opportunity for everyone to use public money for digital payments.

- A digital euro would help maintain the coexistence of public and private money that has served the countries so far.

- A CBDC would be a trustworthy and strong means of payment designed in the public interest.

- Particularly, in Europe, issuance of a digital euro would enable the protection of strategic autonomy while remaining open at a time when there is increased advancement of technology and weaponization.

- Digital euro would level the playing field by allowing intermediaries which are typically less able to keep pace with innovation to offer more technologically advanced products at a competitive price.

- A digital euro would try to provide a means of payment that is free, available for all digital payments, and accessible to everyone, everywhere and supports financial inclusion especially for the vulnerable customers.


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