© Reuters
Investing.com – The European Central Bank (ECB) has released its second report on the feasibility of launching a digital euro. It updates the progress made since September 2022. In particular, it contains information on the practical operation of a digital euro, such as the role of intermediaries, the settlement model and the distribution model.
The ECB began its study of the digital euro in October 2021. It sought to probe fundamental questions about the design and distribution of a central bank digital currency (CBDC) for the euro area.
As part of the proposals, the researchers recommended that the digital euro take a supervised intermediary approach instead of a direct-to-central-bank model. Supervised intermediaries would facilitate all retailer responsibilities, including devices and interfaces enabling digital euro transactions.
“Their responsibilities would be to offer user-facing services such as opening accounts or wallets, payment instruments and onboarding and offboarding, encompassing know-your-customer and anti-corruption checks. money laundering.”
With regard to settlement, the report states that since the digital euro is the responsibility of the central bank, the “Eurosystem central banks” would take care of settlement, including registration and verification.
To maximize adoption of the digital euro, a “seamless funding and distribution experience is essential,” according to the report.