It will lay foundations for a potential digital euro, with work to include finalising a rulebook and selecting providers to develop platform and infrastructure.

It will also include testing and experimentation to develop a digital euro that meets both the Eurosystem’s requirements and user needs, for example in terms of user experience, privacy, financial inclusion and environmental footprint.

ECB has designed a digital euro that would be widely accessible to citizens and businesses through distribution by supervised intermediaries like banks, ECB said in a release.

The design envisages the digital euro as a digital form of cash that could be used for all digital payments throughout the euro area. It would be widely accessible, free for basic use and available both online and offline.

It would offer the highest level of privacy and allow users to settle payments instantly in central bank money. It could be used from person to person, at the point of sale, in e-commerce and in government transactions, the release said.

A compensation model between intermediaries and merchants would ensure that there are incentives for intermediaries to distribute digital euro, as is the case for other electronic payment instruments, and that there are adequate safeguards against excessive service charges for merchants.

The Eurosystem would bear its own costs, including those related to scheme management and settlement processing.

Fibre2Fashion News Desk (DS)