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The European Central Bank (ECB) has approved a new oversight framework for electronic payments following a public consultation. The Eurosystem will use the new payment instruments, schemes and arrangements (PISA) framework to oversee companies enabling or supporting the use of payment cards, credit transfers, direct debits, e-money transfers and digital payment tokens, including electronic wallets. It will also cover crypto-asset-related services, such as the acceptance of crypto-assets by merchants within a card payment scheme and the option to send, receive or pay with crypto-assets via an electronic wallet.

The European Commission (EC) is laying the groundwork for the possible introduction of a digital euro, issuing a targeted consultation aimed at collecting information on expected impacts on key industries (financial intermediation, payment services, merchants), users (consumer associations, retailers' associations), chambers of commerce and other stakeholders in international trade. This is part of a digital euro impact assessment that will inform the development of supporting legislation and regulations.

Rosa Giovanna Barresi provides a comprehensive analysis of the latest digital euro news from the European Central Bank based on recent speeches by Fabio Panetta, Chair of the Eurosystem High-Level Task Force on Central Bank Digital Currency. The investigation phase of the project started on July 14, 2021, and was intended to run until Q3 2023. Design-related decisions will be finalized by the beginning of 2023 and the following months will be spent in developing a basic prototype.

The European Central Bank (ECB) has launched a call for expression of interest for payment service providers, banks and technology companies to join an exercise to develop prototype user interfaces for a digital euro. The ECB specifies 28 separate possible use cases, covering all aspects of the design process, from QR codes to user authentication, electronic ID (EID) and know-your-customer (KYC), among others.

This European Central Bank (ECB) paper discusses success factors for CBDC and how to avoid the risk of crowding out. After examining ways to prevent excessive use as a store of value, the study emphasises the importance of the functional scope of CBDC for the payment functions of money. The paper also recalls the risks that use could be too low if functional scope, convenience or reachability are unattractive for users. Finding an adequate functional scope - neither too broad to crowd out private sector solutions, nor too narrow to be of limited use - is challenging in an industry with network effects, like payments. The role of the incentives offered to private sector service providers involved in distributing, using and processing CBDC (banks, wallet providers, merchants, payment processors, acquirers, etc.) is discussed, including fees and compensation.

The Bank of Lithuania is inviting payment market participants and technology vendors to develop a QR code-based payment solution that enables instant settlements in digital euro at points of sale. The solution should be based on an app running on mobile devices, but connectivity based on short-range wireless technologies (e.g., NFC or Bluetooth) so transactions can be done offline.

This European Central Bank (ECB) paper discusses success factors for CBDC and how to avoid the risk of disintermediation crowding out private payment solutions. After examining ways to prevent excessive use as a store of value, the study emphasizes the importance of the functional scope of CBDC for the payment functions of money. The paper also recalls the risks that use could be too low if functional scope, convenience or reachability are unattractive for users. Finding an adequate functional scope - neither too broad to crowd out private sector solutions, nor too narrow to be of limited use - is challenging in an industry with network effects, like payments. The role of the incentives offered to private sector service providers involved in distributing, using and processing CBDC is discussed, including fees and compensation.

ECB Executive Board member Fabio Panetta pushed back on the CBDC redundancy argument, pointing to the central role of public money in the economy, as the monetary anchor and by its fungibility with private money. Also, a digital euro would boost competition by making a free and easy to use digital means of payment available to everyone. In addition, the option to use CBDC would allow all European intermediaries, big and small, to offer products with a higher technological content at a competitive cost, making them better able to compete with global operators.

European Central Bank (ECB) President Christine Lagarde reportedly says she supports accelerating work on a digital euro. She is confident it will become a reality, but the decision is ultimately up to the ECB's General Council. Lagarde told Bloomberg last year that the digital euro could be rolled out by 2025, although In September ECB adviser Jürgen Schaaf said the ECB's experiments and research into a digital euro are no guarantee that one will be launched.

The European Commission (EC) has received about 10,000 public comments so far on its call for evidence regarding a digital euro, which is to run from April 5 to June 14 and is aimed at getting feedback for the possible establishment and regulation of a digital currency as a new form of central bank money. During a similar period, the EC is also conducting a consultation targeted at relevant authorities and experts, to help policymakers consider issues including users' needs and expectations for a digital euro, a digital euro's role for the EU's retail payments and digital economy, the application of money-laundering rules, privacy and data protection aspects and international payments.

"Next to the fears of government overreach that the European Union's ambitious digital euro project stirred, the main concern of the public is the prospective currency's privacy framework. It appears that this worry might not be overblown after all, as the European Central Bank's (ECB) latest presentation hints that user anonymity is not a desirable design option."

The Centre for Economic Policy Research (CEPR) published a paper that argues that, given the limited private incentives to adopt a digital euro, an aggressive marketing and product design strategy should be pursued. However, the pursuit of such an aggressive approach is unlikely as this runs counter to the European Central Bank's (ECB's) implicit objective of protecting banks' existing business model. This is evident in plans to impose paltry holding limits for consumers, even lower ones for merchants (zero), and negative interest premia during periods of financial stress. The authors argue that the advent of retail CBDC offers the opportunity to rethink the current monetary architecture and to re-evaluate the financial stability risks of private money creation and fractional reserve banking.

The German Federal Office for Information Security (BSI) published a technical guideline (TR) describing requirements that ensure a high level of IT security for the backend systems that support the operation of a central bank digital currency (CBDC) ecosystem. The CBDC ecosystem consists of the backend systems operated by the central bank, the frontend functionality made available to end users by wallet providers, exchange points, which may be operated by third parties other than the central bank, and, potentially, additional service providers. If implemented, the CBDC ecosystem constitutes a critical infrastructure, and the TR aims to ensure that it is made resilient to a wide range of attacks. In addition to implementing the goal of security-by-design, this TR also considers some privacy aspects.

An IU International University of Applied Sciences paper presented the results of a survey of 207 Germans regarding their attitudes towards a digital euro. The results suggest that a digital euro should be designed as a digital version of physical cash, and it should be well and seamlessly integrated into the existing landscape of banking applications. However, the potential benefits are not yet clear, especially regarding transparency and trustworthiness, and some respondents perceived little added value compared to bank accounts or cash.

The ECB updated its digital euro FAQ with particular focus on the rationale for issuing a central bank digital currency (CBDC). "A digital euro would be an electronic form of cash for the digitalized world [that] would give consumers the option to use central bank money in a digital format... [and] providing... a digital means of payment universally accepted throughout the euro area...  Moreover, a digital euro would strengthen Europe's strategic autonomy and monetary sovereignty by boosting the efficiency of the European payments' ecosystem as a whole."

The European Central Bank (ECB) published a paper that analyzed the impact of the introduction of a digital euro on the ECB and commercial bank balance sheets, based on a theoretical model applied to Q3 2021 balance sheet data from over 2,000 euro area banks. It found that the impact depends on i) the number and speed of deposit withdrawals, ii) the liquidity available within the banking system at the time of the digital euro introduction, iii) the liquidity risk preferences of the markets and supervisors, iv) the bank's business model, and v) the functioning of the interbank market. The paper found that a €3,000 digital euro holding limit per person, would have been successful in containing the impact on bank liquidity risks and funding structures and on the Eurosystem balance sheet, even in extremely pessimistic scenarios.

On July 18, 2023 the European Central Bank (ECB) New Technologies for Wholesale settlement Contact Group (NTW-CG) held its second meeting. The Group is exploring how to settle DLT transactions with central bank money, including a wholesale CBDC. The pilots will be open to financial institutions with access to the TARGET payment system, with the onboarding to start later in 2023 and tests to commence in Q2 2024. Three interoperability-type solutions will be tested. Deutsche Bundesbank and Banca d'Italia will test two different non-CBDC solutions that initiate payments on TARGET and use trigger chains to instruct the DLT-based securities settlement platform to transfer ownership of securities as soon as payment is confirmed. The Banque de France will test a wholesale CBDC token option based on its previous trials, in which settlement will be enabled through interoperability with multiple other DLT ledgers.

The Digital Euro Association (DEA) Digital Euro Regulation Working Group has produced a commentary on the EU's Proposal for the establishment of the digital euro. This comprehensive document delves into the proposal's nuances, highlighting challenges, opportunities, and the broader implications for the European financial landscape.

The Banque de France (BdF) published an updated set of conclusions and lessons learned from its twelve distributed ledger technology (DLT) based wholesale central bank digital currency (CBDC) experiments. They show the operational feasibility and practical implementation of the three models it has conceptualized for issuing DLT-based wholesale CBDC; the interoperability, distribution and integration models. They all address key aspects of wholesale CBDC implementation and each model offers different capabilities and functionalities compared to the conventional systems, so they can be complementary rather than exclusive.

The European Central Bank (ECB) published a digital euro project update. It was made clear that a digital euro will offer basic services free of charge. To foster network effects, intermediaries will be compensated for the services they provide, as they are for comparable electronic payments, while legislative safeguards will prevent merchants from being overcharged by intermediaries. The Eurosystem would bear its own costs, as it does for banknotes. Also, online and offline functionalities will be released simultaneously from the outset. Offline functionality will settle transactions using "secure hardware" to avoid hacking and forging, transactions will be settled immediately between devices, payments received will be transferable to another device without first connecting to the internet, and the Eurosystem will not see users' personal details or their payment patterns.