Today the European Central Bank (ECB) published a digital euro progress report, following the decision to progress to the two-year preparation phase last October. The report gives considerable coverage to the privacy aspects of its central bank digital currency (CBDC), following up on its recent blog post on the same topic that we previously covered. It also covers several practical aspects such as calibrating holding limits, caps on fees and tenders for work.
This January the ECB published a vendor call for €1.1 billion worth of contracts for five components. As part of today’s report, this process is seen as one of the main four tasks of the preparatory phase. Establishing framework agreements with suppliers will involve critical design decisions. However, the report states, “These agreements are not in any way a commitment to initiate development, but are simply a preparatory step to ensure the Eurosystem’s readiness should the development and implementation of a digital euro be warranted in the future.” According to the timeline, the ECB will select vendors in Q1 2025 and then start a second round of procurement procedures.
Previously the ECB floated the idea of a €3,000 holding limit for the digital euro. In today’s progress report the ECB said the final limits would be set based on the economic conditions closer to launch. However, work is progressing to come up with a methodology.
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