The governing council for the European Central Bank (ECB) will start preparing for a potential digital euro next month, according to an announcement on Wednesday.
The two-year preparation will include further testing, finalizing a rulebook and selecting providers who can develop the technological infrastructure. The phase won’t include an issuance decision.
The new phase starting on Nov. 1 follows a two-year investigation into how a digital euro could be designed and distributed. The results of that investigation were published in a new report.
“We need to prepare our currency for the future,” said ECB President Christine Lagarde in the announcement. “We envisage a digital euro as a digital form of cash that can be used for all digital payments, free of charge, and that meets the highest privacy standards. It would coexist alongside physical cash, which will always be available, leaving no one behind.”
Even if the digital euro moves on to the final stages, the central bank digital currency (CBDC) requires approval from the European Parliament, which has largely seemed skeptical.
In September, Lagarde said the CBDC was likely still at least two years away, in part to have more time to shoot down conspiracy theories. And other ECB officials have been similarly cautious.
“There is still a long journey ahead of us, and further close cooperation between European institutions will be needed in order to determine the optimal design of a digital euro,” Fabio Panetta, an executive board member of the ECB, told the European Parliament’s Committee on Economic and Monetary Affairs earlier that month.