Progress on the digital euro investigation phase

14 July 2023

The fourth progress report on the investigation phase of a digital euro explains why a digital euro should be free of charge for basic use and how it could strengthen financial inclusion. It also sets outs key principles of a compensation model for the distribution of a digital euro and gives an update on other ongoing areas of work. In addition, it looks at the results of the prototyping exercise and the market research on technical solutions for a digital euro.

The compensation model aims to create incentives for banks and payment service providers (PSPs) to distribute digital euro and to ensure that digital euro payments will be free of charge and widely accepted across the euro area.

The Eurosystem is also analysing how digital euro can be transferred from an individual’s personal wallet to another one, as well as how to prevent and detect fraud in digital euro payments.

Financial inclusion is a key principle for a digital euro, and it should be designed to be suitable for older citizens, people with disabilities and users with limited financial or digital skills.

Based on the result of the investigation phase, the Governing Council of the ECB is to decide whether to start testing and developing a digital euro in the autumn of 2023. A digital euro would only be issued with the support of European institutions. The ECB welcomes the European Commission’s legislative proposals on digital euro and on the legal tender status of euro cash and stands ready to provide technical input to support the work of the EU co-legislators. ECB Executive Board member Fabio Panetta has written a letter to the Committee on Economic and Monetary Affairs (ECON) of the European Parliament to inform it of the publication of the report and welcomes ongoing discussions with ECON members.