The European Central Bank (ECB) has published the third progress report on the digital euro. Meantime, the ECB reports on the findings of focus groups commissioned by the ECB concerning people’s views on the features of a potential digital wallet.
The progress report presents a third set of design and distribution options, endorsed by the ECB’s Governing Council. That would feed into the overall design of a digital euro. In its initial releases, a digital euro would be accessible to euro area residents, merchants and governments. Non-resident euro area citizens might also have access. That is provided that they held an account with a euro area-based payment services provider (PSP).
In further releases, consumers from selected third countries could also have access. This would depend on accessibility rules to be set out in the legislative framework for a digital euro. The report also anticipates the potential provision of cross-currency functionalities with other central bank digital currencies outside the euro area.
The Governing Council also proposes that a digital euro could be distributed via PSPs, as defined in PSD2. A digital euro could be made available to euro area residents via existing banking apps or via an app provided by the Eurosystem offering a harmonised entry point for basic payment functionalities provided by PSPs. Supervised intermediaries – for example banks distributing digital euro – would be required to provide a set of mandatory core services to end-users and could offer additional services. These could include conditional payments or the ability to split person-to-person payments among multiple parties.
The report also indicates that the design of the digital euro would be adjusted, as needed. That is, to comply with the legal framework to be adopted by European co-legislators.
ECB reports consumer views on a potential digital wallet
The ECB has also published the findings of a commissioned study using focus groups to evaluate people’s views on specific features of a potential digital wallet. The study found that most participants were interested in trying some of the digital wallet features presented. The concrete findings are relevant to the design features of a possible digital euro.
The study shows that P2P money transfers – available throughout the euro area – are considered an essential feature. Offline payments, which are currently not widely available, are deemed a useful feature when, for example, someone has limited connectivity. Participants also valued budget management tools and conditional payments, including payment on delivery and pay-per-use.