The European Central Bank (ECB) is extending its development of a central bank digital currency (CBDC) system for institutional transactions, announced on February 20.
Development Phases
The establishment of the new system will occur in two phases. First, the CBDC settlement platform will be developed, followed by deeper integration into existing ECB systems, such as foreign currency exchange markets.
ECB Officials' Comments
ECB executive board member Piero Cipollone, overseeing the wholesale CBDC initiative, stated that the program will help achieve a more harmonized and integrated European financial ecosystem.
Challenges and Criticism of CBDCs
Despite ECB's efforts, CBDCs face criticism due to privacy concerns, potential threats to individual autonomy by centralized state entities, and the lack of any fundamental change in the inflationary mechanics of digitized fiat currency.
The ECB continues its move towards a more digital economy despite criticisms and challenges. This is expected to bring significant changes to Europe's financial landscape.
