EU citizens are unlikely to get their hands on a digital euro until 2026 at the earliest, as the European Central bank considers further design and distribution considerations .
In a document on progress of the initiative, the ECB says a number of steps will need to be taken before a digital euro can be introduced, including analysis of how financial intermediaries could provide front-end services, how the currency would be distributed to users and how payments would be settled.
One particular sticking point appears to be around offline use, in which transactions are validated on a peer-to-peer basis, as opposed to online checks conducted by individual banks. "The time to market for this solution is more uncertain” the ECB states. “The development of a third-party validated solution for online payments should not be delayed in case the timely delivery of a peer-to-peer validated solution for offline payments proves to be unfeasible.”
The EU central banks says the Governing Council will decide in autumn 2023 whether to start a "realisation phase "to develop and test the appropriate technical solutions and business arrangements necessary to provide a digital euro.
"This phase could last around three years," says the central bank. "A decision on the possible issuance of a digital euro may only come later, also depending on legislative developments regarding a regulation to establish and govern essential aspects of the digital euro that will be discussed by the European Parliament and the Council of the EU, upon a proposal by the European Commission."
In an update to lawmakers, ECB board member Fabio Panetta says policy makers will soon start work on a rulebook for the digital euro scheme.
"Putting in place a set of rules from an early stage is crucial for the market to be able to develop digital euro solutions and be ready if and when a digital euro is introduced," he says.
Panetta faced a series of questions from the audience on the decision to select Amazon to help in the development of a digital euro prototype, with law makers expressing concern over privacy issues and the company's American roots and market dominance.
In response, Panetta re-iterated that the prototype under development had little bearing on future plans for wider participation in the project.
"We will work together with different stakeholders - intermediaries, consumers and retailers - so that they can contribute their views and expertise as the scheme is being developed," he says.