ECB’s Panetta: Digital Euro Could Come Out Within 4 Years

Peer-to-peer payments could be a first test case, though no final decision has been made yet.

AccessTimeIconMay 16, 2022 at 10:29 a.m. UTC
Updated May 16, 2022 at 2:03 p.m. UTC

Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

A digital euro could be issued by the European Union (EU) within four years, a senior official from the European Central Bank (ECB) said Monday, with peer-to-peer payments potentially among the first uses.

The timeline for the central bank digital currency (CBDC) has been pushed back and forward because of concerns over Russia’s war in Ukraine and the rise of private stablecoins like Facebook’s now-abandoned libra.

“The idea would be that, let’s say, four years from now, we will be ideally ready to issue the digital euro,” Fabio Panetta, a member of the European Central Bank’s executive board, said at an event at the National College of Ireland. “It’s a very complex project, never done before … I’m a bit optimistic that in four years’ time we will be prepared.”

Peer-to-peer (P2P) payments, allowing transactions among friends, could be the first testing ground for the new technology before it spreads to other areas like payments in stores or online, Panetta suggested.

“A P2P payment solution that covers a broad set of users across the entire euro area could provide fertile ground for the adoption of a digital euro,” he said, citing research that showed the application would have widest use early on.

In October, the ECB started a two-year investigation phase to look at issues like what use cases to prioritize, although the ECB hasn't decided yet on whether to issue a digital euro in the first place. Panetta has previously said that a realization phase due to start late next year could last three years.

In March, ECB President Christine Lagarde said the sanctions following the war in Ukraine offered a reason to speed up the plans, but other EU officials Monday suggested they were taking their foot off the gas pedal.

“There was some time back a sense of more urgency, because of the concerns of what might happen from private providers,” Mairead McGuinness, the EU’s financial-services commissioner, said at the same event. “Nobody is rushing … we need to move swiftly but not hastily.”

The idea of the EU issuing its own CBDC first emerged after an industry consortium led by Facebook proposed its own crypto currency, libra, subsequently renamed diem before being abandoned.

But recent collapses in the private crypto market may add yet one more reason to pursue the project, Panetta said.

Stablecoins don’t have the regulatory safety net offered to banks and “are therefore vulnerable to runs,” he said, citing the crash last week of terraUSD (UST), which is supported by the nonprofit Luna Foundation Guard.

“Just last week the world’s biggest stablecoin temporarily lost its peg to the dollar,” he added, referring to the Tether asset (USDT).

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

CoinDesk - Unknown

Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

Trending

1
CoinDesk - Unknown
Animoca Brands Leads $32M Funding Round for Planetarium Labs

The capital will help the Web3 gaming company develop its community-driven network.

CoinDesk - Unknown
2
CoinDesk - Unknown
Solana Labs, Multicoin Accused of Violating Securities Law by SOL Investor

Solana’s SOL token is an unregistered security whose insiders have benefitted while retail suffered, the suit alleged.

CoinDesk - Unknown
3
CoinDesk - Unknown
First Mover Asia: How Inaccurate Data Misled Investors to See Massive Outflows From This Crypto Exchange; BTC Holds Steady Over $20K

KuCoin founder Johnny Lyu said those data feeds plus mislabeled, on-chain wallets propagated rumors last week that led to the token exodus; ether rises in Wednesday trading.

CoinDesk - Unknown
4
CoinDesk - Unknown
Shiba Inu Plans to Launch Stablecoin, Reward Token, Collectible Card Game

SHIB prices hardly budged on the news but gas token BONE and ecosystem token LEASH rallied.

CoinDesk - Unknown