- Digital euro will be launched as a retail CBDC.
- Prototyping will start in August and will last until Q1 2023, said Eurosystem.
Central Bank Digital Currencies (CBDCs) are digitised forms of fiat currencies that are regulated by central banks of different nations. Financial inclusion, digitisation of fiat and centralised ledger are keenly attracting the world’s central banks to adopt CBDCs. 86% of the world’s central banks are investigating these digital currencies.
In late 2021, European Central Bank (ECB) united with other euro-based national central banks announced the initiation of a two-year investigative phase of digital euro experimentation. Recently in April, it was announced by the ECB that it is willing to board suitable payment service providers, banks or other related firms on developing the “prototypes for digital euro project payment solutions”.
Digital Euro’s Prototyping Exercise
Based on their capabilities and specific use cases, five front-end providers will be selected and will cooperate with ECB to develop a prototype for the digital euro bill. The application for interested front-end providers to join the pool will be active until 20 May 2022, said the Eurosystem. The selected providers will unite for an information exchange session. Specifications for joint prototyping activities will be regulated by the Eurosystem. The prototyping will focus on developing the customer interface functionality and link backend activities.
The prototyping exercise is anticipated to start in August and conclude in December. The ECB also reported that the investigative phase of the digital euro bill will end in October 2023. Recently, Namibia confirmed its plan to explore and launch its own CBDC. People’s Bank of China and the Federal Reserve Bank of Boston have also decided to develop their native CBDCs.
