In a new document published on its website for a Feb. 22 meeting, the European Central Bank (ECB) said a Central Bank Digital Currency (CBDC), or digital euro, should first focus on online and peer-to-peer payments.
The bank pointed out that developments related to the transactions like paying taxes, receiving wages, and purchasing in physical stores should come later.
- The document stated that a gradual approach would help the bank ensure end-users have a seamless payment experience with its CBDC.
- ECD also stressed that such an approach would simplify the implementation process.
- If the approach in the document is adopted, consumers will first use digital euro only in e-commerce payments and payments made among private individuals.
- A separate document for the same meeting stated that basic functions of the digital euro, like payments, should be free for private users.
- Additionally, ECB suggested that the banks should be encouraged not to charge merchants too much for use through the new laws.
- ECB is one of seven institutions of the European Union (EU).
- The bank is expected to officially decide whether to issue a CBDC later this year.
