ECB introduces draft rulebook for digital euro payments

Through this, the ECB intends to offer a view into the technical aspects of central bank digital currency (CBDC) design. The process allows all the stakeholders involved to review the rulebook in its current state. With the development having started in January 2023, the rulebook is being created by the ECB’s Rulebook Development Group (RDG), which participants include industry advocacy groups and national central banks. Since the beginning of its work, the group addressed multiple aspects of CBDC design, such as functional and operational models, high-level architecture and standards, and participants’ rights and obligations under the draft legislation.

Currently, the draft rulebook is being reviewed by the RDG, with the latter making adjustments to the first draft taking into consideration the feedback received in the process, as per the ECB’s statement. According to the information provided by the ECB, the draft rulebook aims to be flexible to accommodate any future modifications and updates in agreement with the result of the digital euro legislative process. The RDG intends to proceed with further development for finalising the rulebook during the digital euro preparation phase, with the group aiming to include additional sections on minimum requirements for user experience, branding and communication standards, certification, testing and approval procedures, internal rules, risk management, and interoperability and implementation specification.

Due to the fast pace at which digitalisation is modifying how individuals pay, the development of a digital euro comes as a response to the shift towards online shopping and digital payments. As an electronic form of cash, the digital euro intends to provide consumers with the possibility to leverage central bank money in a digital format, accompanying banknotes and coins. With the introduction of the digital euro, the ECB focuses on offering a universally accepted payment method throughout the euro area, that can be used for payments in shops, online, or from person to person. The digital euro aims to also strengthen the euro area's strategic autonomy and monetary sovereignty by increasing the efficacy of the European payments ecosystem, while also supporting innovation and expanding the resilience to potential cyberattacks or technical issues.

The digital euro project was in an investigation phase for approximately two years, with the ECB’s Governing Council deciding to enter a preparation phase as of November 2023. The objective of this phase is to develop and test a digital euro following the design choices and technical obligations defined during the investigation phase. Additionally, the preparation phase assists in enabling further analysis, testing, experimentation, and stakeholder consultation, while guaranteeing that the digital euro meets the requirements for quality, security, and usability. Even if the beginning of the preparation phase represents a significant step, it does not anticipate any decision of the Governing Council regarding the issuance of a digital euro, as it can only be considered after the legislation is adopted.

Source: Link