The European Central Bank is accelerating work on a digital euro to keep up with the “ambitious pace” set by EU leaders as the project’s urgency increases in the face of geopolitical challenges including an increasingly hostile United States under Donald Trump.
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In its third progress report on the preparation phase of a CBDC, the ECB acknowledges that since its last update in December, there has been an increased push from the continent’s leaders to reduce its reliance on Visa and Mastercard.
In March, leaders put out a statement warning that: “In a more fragmented and digital world, accelerating progress on a digital euro is key to support a competitive and resilient European payment system, contribute to Europe’s economic security and strengthen the international role of the euro.”
In the latest report, ECB executive board member Piero Cipollone says: “We are pleased to see that our efforts remain on track as we keep working to deliver on the request of EU leaders to accelerate progress on a digital euro. In light of today’s geopolitical and economic challenges, we welcome an ambitious pace for the legislative work.”
In recent months, the ECB has launched an innovation platform with around 70 market participants conducting technical tests of features such as conditional payments and exploring conceptual ideas and use cases for integrating the digital euro into the financial ecosystem.
In parallel, the ECB has worked with small merchants, vulnerable consumers and under-represented groups through focus groups, interviews and collaborations with consumer associations to understand their needs, preferences and challenges to ensure the digital euro’s design is as inclusive and accessible as possible.
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