European Central Bank officially launches digital euro project: Pilot confirms no technical obstacles, will begin two-year investigation period

The European Central Bank (ECB) officially announced on the 14th the launch of the digital euro project. Based on analysis and experiments conducted over the past nine months, the ECB will accelerate the confirmation of this project and proceed to a two-year investigation phase.

What Has the European Central Bank Done in the Past Nine Months?

The President of the European Central Bank, Christine Lagarde, stated:

We have been working on the digital euro report for nine months. During this period, we have conducted further analysis, sought the opinions of citizens and professionals, and carried out some experiments, yielding encouraging results. All of this has led us to decide to accelerate the launch of the digital euro project.

Over the past nine months, the European Central Bank has conducted experiments in four areas: "Digital Euro Ledger," "Privacy and Anti-Money Laundering," "Circulation Limits of the Digital Euro," and "End-User Offline Use and Device Inclusivity." The conclusion is: No technical obstacles in design have been found.

Among them, the real-time full automated clearing system TARGET instant payment settlement (TIPS) and alternative solutions such as blockchain have been proven capable of processing over 40,000 transactions per second. The experiments have also shown that a structure combining centralized and decentralized elements is feasible.

Furthermore, addressing concerns about energy consumption, the European Central Bank also stated that the digital euro would be highly environmentally friendly, with energy consumption negligible compared to cryptocurrencies like Bitcoin.

What Will the European Central Bank Do in the Next Two Years?

The European Central Bank stated that the two-year investigation period aims to address design and distribution issues. It must meet the usage needs of Europeans, prevent illicit activities, and ensure no adverse effects on financial stability and monetary policy. A Market Advisory Group has been established, and the Euro Retail Payments Board has been invited to assist in the investigation.

Nevertheless, the European Central Bank emphasized that this project does not necessarily mean the implementation of the digital euro but rather a decision-making process. Additionally, the role of the digital euro is not intended to replace cash but to complement it.