ECB Proceeds With Two-Pronged Approach For CBDC, Launch Set Before End Of 2026

• The ECB confirmed that it will launch the Digital Euro CBDC before 2026 ends.

The public often frowned at talks regarding Central Bank Digital Currency (CBDC) initiatives. Despite that, the European Central Bank appears to be on track to issuing one before the end of 2026.

ECB to Launch CBDC Before End of 2026

On Tuesday, the ECB announced that its Governing Council has greenlit a plan that will integrate distributed ledger technology (DLT) solutions in fiat transactions using central bank money. It comes with a dual-track approach to ensure its short-term and long-term success.

Pontes will handle the development of a Eurosystem DLT-based solution under the program’s short-term track. It will link DLT platforms and the ECB’s Target Services, the EU’s real-time gross settlement (RTGS) system for high-value euro payments.

ADVERTISEMENTMeanwhile, Appia will center on a long-term strategy for the safe and efficient operations of the Digital Euro on the global stage. The ECB stated that the Eurosystem will continue to assess DLT solutions with public and private stakeholders.

The ECB urged market participants to help it refine the guidelines and implementation for its upcoming CBDC.

Wholesale and Retail CBDCs

For now, the ECB is solely focusing on a wholesale CBDC. This is the digital version of the euro, which the central bank specifically tailored for institutional and securities transactions.

ADVERTISEMENTOn the other hand, a retail CBDC is widely available to the public for merchant payments and fund transfers.

Countries Exploring or Piloting CBDCs

To date, over 100 countries are exploring the adoption of CBDCs. Some of them have already launched a pilot for these digital assets. China is by far the biggest economy that has rolled out its CBDC within a limited coverage.

The Digital Yuan, also known as the e-CNY, is a retail CBDC that the general public utilizes for merchant payments. Several provinces in China have also integrated the digital asset for the payment of public workers’ salaries, subsidies for citizens, tax payments, and government procurement.

Among the Chinese cities that have launched a pilot for the e-CNY include Shenzhen, Suzhou, Chengdu, Xiongan, and Changshu. However, it has faced challenges in broader adoption as many people still prefer fiat for transactions. Additionally, most favor already existing e-payment apps due to their ease of use and familiarity with the tech.

Stablecoins Vs CBDCs

Countries like the US, though, are reluctant to adopt retail CBDCs due to public backlash. This resulted in President Donald Trump outright banning them in favor of stablecoins in his first batch of Executive Orders upon assumption in office in his second term.

The public’s concerns about CBDCs mostly revolved around privacy breaches and government overreach.

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