ECB plans prioritizing P2P and online payments in digital euro rollout

The European Central Bank (ECB) has recently declared that its digital euro enrollment should prioritize e-commerce and person-to-person payments, with remaining use cases to follow in the second phase of its central bank digital currency (CBDC) development.

Indeed, peer-to-peer and e-commerce payments assume seniority in the sequence of use case rollout for the digital euro in the first release, followed by other contexts, such as physical stores and government payments, in the second, according to the ‘Rollout approach for the digital euro’ document published on February 22.

According to the ECB’s digital euro project team: 

“Multiple use cases are required to address the variety of end-user needs and market gaps across [euro area (EA)] countries, responding to a landscape with diverse payment behaviors and preferences.”

In their view, such a “staggered approach” has multiple practical advantages, as it would contribute to “ensuring a smooth end-user payment experience (i.e., gradual understanding and adoption of the different use cases and technologies by end-users)” and “reduce the implementation complexities associated to (e.g., rolling out at pan-EA level).”

Earlier in September 2022, ECB president Christine Lagarde commented on the institution’s plans to unveil a digital euro, suggesting that it should be “borderless, it shouldn’t be borderline, and it should certainly not cross the line, which is why it should be regulated and properly supervised.”

ECB’s attitude toward crypto

Elsewhere, the ECB has demonstrated a reluctant attitude towards the cryptocurrency sector, as it sent out a warning to eurozone countries in July 2022 about the dangers of regulators getting ahead of the Regulation on Markets in Crypto-Assets (MiCA) law that isn’t expected to come into full effect before 2024.

In January 2023, the ECB’s executive Fabio Panetta urged for the regulation of investing in cryptocurrencies like gambling due to, in his view, their “speculative” nature and lack of “any socially or economically useful function,” as Finbold reported.

More recently, the ECB supervisors suggested that banks in the European Union (EU) should start applying caps on Bitcoin (BTC) holdings before the global regulatory framework set out by the Basel Committee on Banking Supervision (BCBS) becomes legally binding, citing potential risks from the crypto assets spilling over into the banking sector.