The European Central Bank’s digital euro project manager, Evelien Witlox, has emphasized the urgent need to accelerate the development of Europe’s central bank digital currency (CBDC). Her statement to Euronews comes as global competitors advance their own digital currency initiatives.
“We are still at the forefront of the development [of a CBDC],” Witlox stated, highlighting concerns about falling behind other major economies. With the UK and China making major progress in their CBDC development, the ECB faces mounting pressure to maintain its competitive edge in the digital currency space.
Fragmentation of Payment Solutions
The urgency stems from the current fragmentation of payment solutions across the Eurozone. Notably, 13 of the 20 eurozone countries lack national card schemes, relying heavily on international providers like Visa and Mastercard. This dependency on foreign players, combined with declining cash usage and rising cryptocurrency adoption, has accelerated the need for a European digital payment solution.
Since its proposal in 2021, the digital euro project has progressed through several development phases. However, the legislative framework remains pending, with neither the Parliament nor the Council taking a position on the Commission’s proposal. “Discussions have progressed, and I can only reiterate the urgency to keep sufficient pace in this process,” Witlox emphasized, addressing the ongoing legislative process in Brussels.
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Global Adoption of CBDCs
The ECB’s push comes as 134 countries, representing 98% of the global economy, explore CBDC implementation. Major economies like China have already launched pilot programs, while the UK advances its own digital currency research.
The ECB has addressed key stakeholder concerns regarding the digital euro’s implementation. The proposed framework includes no interest earnings on deposits, holding limits for financial stability, enhanced privacy features for offline transactions, competitive fees for merchants, and measures ensuring financial inclusion.
While no concrete deadline exists for the digital euro’s launch, the ECB continues to emphasize the importance of maintaining momentum in its development. The project manager also stated that banks and non-banks will be key players in the roll-out of their CBDC.
