The European Central Bank has published its third progress report on its work on the digital euro, its planned retail central bank digital currency (CBDC). It is currently in the preparation phase, which runs until the end of October, at which time a decision will be made on whether to launch it. This decision depends on the passage of supporting legislation.
The update covers work on the digital euro rulebook, the recent exploratory work with market participants on innovative applications, and ongoing stakeholder engagement.
One of the more interesting aspects was an update on the ECB’s approach to an offline digital euro. Technically, this is a very challenging area – ensuring that payments remain secure and avoiding double spending, despite the inability to connect to payment systems. While offline payments are often designed for regions with weak internet connectivity, they become critical during emergencies when digital currency might be the primary payment method if cash usage has declined.
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