The European Central Bank (ECB) releases its second report on the preparation stage for the digital euro, discussing holding limits and laws harmonization.
Midway Development Stage
The ECB report marks a midway point in the preparatory phase, following the investigative and design phases. The Rulebook Development Group has launched seven workstreams involving market participants and central banks to continue development. The rulebook aims to harmonize national laws to ensure universal standards. Limiting CBDC holdings is a point of contention between the ECB and national central banks. One proposed measure is a 'reverse waterfall' to automatically transfer excess digital euros to fiat accounts.
Keeping the Euro European
The report addresses competition in services between European and non-European providers and the need for services like digital wallets. It states payment service providers (PSPs) could use digital euro infrastructure to create new services. The report also mentions possible user experience improvements for privacy-sensitive users enjoying cash-like privacy.
Digital Euro Prospects
The selection of technical service providers and communication with the public and stakeholders will continue. The next progress report on the digital euro will be published in Q2 2025. The decision on launching the European CBDC may be made in October 2025.
The ECB continues its preparation for a potential digital euro launch, focusing on technical solutions and privacy concerns.
