The European Central Bank (ECB) is establishing seven new ‘workstreams’ to develop the digital euro rulebook and issued a call for candidates for each. Experts in payments infrastructure and architecture, technical specifications, and scheme management were invited to apply by April 5.
Each applicant must be nominated by a member of the Rulebook Development Group (RDG)—made up of consumer, retailer, and intermediary section representatives—to whom the workstreams will report to assist it in drafting various sections of the digital euro rulebook.
The rulebook sets out a central bank digital currency (CBDC) framework. “A new digital form of the euro which complements cash and which consumers and businesses can use throughout the euro area,” as described by the ECB.
The development of the digital euro rulebook is being supported by workstreams that focus on specific topics and involve market participants. Three such workstreams were launched in 2023, covering the scheme’s compatibility with standards, as well as technical requirements, and identification and authentication.
The ECB is now inviting applications for seven new workstreams, which will cover minimum user experience (UX) standards; certification and approval framework; risk management; interactions between payment and acceptance solutions of individual and business users; interactions between individual users and their intermediaries; interactions between business users and their intermediaries; and interactions between digital euro
service platform and intermediaries.
The ECB stated that once complete, the draft rulebook would be “sufficiently flexible to accommodate any future adjustments and will be updated in accordance with the outcome of the digital euro legislative process.”
It went on to note that the ECB’s Governing Council would make the final decision on whether to issue a digital euro CBDC, which would only be made “after the legislative act has been adopted.”
Digital euro legislative process
A digital euro has been on the cards since June 2023, when the European Commission
unveiled legislative proposals detailing a plan to make the CBDC legal tender and available across the eurozone while still preserving cash payments.
The first legislative proposal focused on safeguarding the role of cash and ensuring it would remain universally accepted as payment. A digital euro would exist alongside the current payment options, the plan said.
In November 2023, the ECB proceeded to the “preparation phase” of the project and began testing to explore technicalities and operational procedures. It is expected to formally start experiments on a CBDC in the second quarter of 2024.
On February 15, the European Parliament’s Committee on Civil Liberties and Justice (LIBE)
voted overwhelmingly to endorse the latest digital euro report and back the ECB’s proposed digital euro, clearing a significant legislative hurdle and taking the bloc one step closer to a CBDC.
The draft endorsed by LIBE includes amendments that support permissionless blockchains
and address prior concerns raised by European banks. It also states that payment providers can use their own wallets.
Member of European Parliament Stefan Berger was nominated as Rapporteur for the European Commission proposal and on February 9 tabled his draft report, which is scheduled to be voted on by the Committee on Economic and Monetary Affairs (ECON) on 8 April 2024, and in a plenary vote of the European Parliament on 22 April 2024.
If the digital duro proposal passes its full vote—which, given the comprehensive support it received from LIBE, seems likely—it will then be up to the ECB to decide if, how, and when to implement a Europe-wide CBDC.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: CBDCs are more than just digital money
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