ECB’s Digital Euro Development: An In-Depth Look at the Rulebook’s Progress

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The European Central Bank (ECB) has made significant strides in the development of the digital euro, notably through the efforts of its Rulemaking Group (RDG). This team played an important role in designing the framework for digital payments in euro, focusing on a comprehensive set of rules, standards and procedures.

RDG work, which began in January 2023, has covered various aspects of the implementation of the digital euro, including its functional and operational models, architecture and high-level standards, and the rights and obligations of participants under the proposed legislation. Representatives from industry advocacy groups and national central banks are part of the RDG, providing a diverse and inclusive approach to the development of the rulebook.​​​​

Since the last update in June 2023, the RDG has successfully drafted the initial chapters of the digital euro rulebook. This project covers key areas such as functional and operational models, detailing the end-to-end flows for all use cases and services related to the digital euro. Furthermore, it addresses the requirements of the technical scheme, which include a high-level architecture and potential standards for the digital landscape of the euro. The Adherence Model, another important component, outlines the rights and obligations of scheme members in accordance with the draft law.

The RDG is currently reviewing the draft rulebook, with plans to make adjustments based on feedback received during this process. This step ensures that the rulebook remains flexible enough to accommodate any future changes and is consistent with the outcome of the digital euro legislative process. RDG’s ongoing work includes finalizing the rulebook and adding sections on minimum user experience requirements, branding and communication standards, certification procedures, testing and approval, internal rules, risk management, interoperability and implementation specifications​​​​

In November 2023, the ECB moved into a “preparatory phase” for the digital euro after the conclusion of the investigation phase. This two-year phase involves finalizing rules, conducting experiments and gathering feedback, while developing a legislative framework. The draft legislation received mixed reviews from various sources, highlighting the complex nature of establishing a central bank digital currency

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The ECB underlines the importance of cooperation between public and private entities in the implementation of the digital euro framework. Intermediaries, such as banks and other financial institutions, will play a crucial role in bridging the gap between the central bank and end users. They may also engage the services of third parties to fulfill their roles, although these third parties will not be direct participants in the scheme. This collaborative network forms the backbone of the digital euro ecosystem, ensuring regulated and seamless transactions in this new digital currency framework. As the preparatory phase progresses, RDG plans to expand the rulebook to cover areas such as user experience, branding, certification and interoperability.​​

In conclusion, the ECB’s RDG is at the forefront of shaping the future of the digital euro, ensuring that its implementation is guided by a comprehensive and adaptable set of rules and standards. This collaborative and inclusive approach involving both the public and private sectors is critical to the successful integration of the digital euro into the wider financial ecosystem.

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