A Digital Euro
As part of the Eurosystem, the Central Bank of Ireland is investigating the potential issuance of a central bank digital currency (CBDC) – a digital euro, which would complement euro banknotes and coins.
What would a digital euro look like?
A digital euro would be a central bank liability (similar to physical euro banknotes and coins), except offered in digital form. It would be a fast, secure and easy to use instrument, which would be available for use by European citizens and businesses for the everyday payments. A digital euro would ensure that citizens of the euro area would continue to have access to widely accepted, safe and trusted means of payment for the digital age.
Initial analysis has shown that there are many possible design solutions using a range of innovative technologies. The Eurosystem’s investigation will seek to identify the design most appropriate for the citizens and businesses of the euro area.
Why is the Eurosystem investigating this?
Around the world, central banks are considering whether and how they might issue CBDCs for a number of reasons, including tackling the declining use of cash; providing a catalyst for digitalisation of economies; increasing financial inclusion; and promoting competition in payments services.
For the Eurosystem, the issuance of a digital euro could support the wider policy objectives of the European Union including the digitalisation of the European economy and fostering the international role of the euro. A digital euro could also help to tackle specific monetary concerns by responding to the declining use of cash as a means of payment and ensuring the normal provision of payment services.
What would a digital euro mean for me?
A digital euro would give you greater choice for how you pay for goods and services, complementing cash and other payment services. If a decision to issue a digital euro is taken in the future, it would be the largest project undertaken by the Eurosystem since the launch of the single currency and could potentially have very significant implications for citizens, businesses and the financial system. Consequently, before any decision can be made to introduce a digital euro, all foreseeable benefits and potential drawbacks need to be carefully considered by the Eurosystem, the European Commission and the central banks and governments of euro area countries.
How long it will take?
In October 2021, the Eurosystem launched a two-year investigation phase to explore possible technical and policy options that could form the basis of a digital euro design. This investigation will consider how digital euro could be distributed and used by citizens and businesses and the potential impact it may have on the European economy and society. Following the completion of the investigation phase, the Eurosystem will decide if we should proceed to develop a digital euro, creating and testing design solutions with input from various stakeholders. Only when these phases are complete will a decision to issue a digital euro be made.
How can I find out more?
The ECB and Eurosystem national central banks will provide updates on the digital euro project as the work progresses.
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