ECB to issue digital euro by 2026 says board member Panetta
Pilot European CBDC to start in Q4 2023, reveals Fabio Panetta from European Central Bank
European Central Bank (ECB) executive board member Fabio Panetta has revealed a European central bank digital currency (CBDC) could be out by 2026 after a three-year pilot phase starting in the fourth quarter of 2023.
“At the end of 2023, we could decide to start a realisation phase to develop and test the appropriate technical solutions and business arrangements necessary to provide a digital euro. This phase could take three years,” he said.
Speaking at the National College of Ireland, Panetta added: “CBDCs will allow public money to continue to play its role in anchoring the stability of the payments system and contributing to its efficiency. And private money will add innovation and diversity to this foundation. The coexistence of public and private money can continue to be a win-win situation – perhaps even more so in the digital age.”
US, UK and EU not even in CBDC game
However, according to some CBDC specialists, the timescale adopted by the ECB, the US and the UK is lagging behind other nations – such as China and Russia, which have already started pilot programmes.
Speaking to S&P Global Market Intelligence, Maria Shagina, a visiting fellow at the Finnish Institute of International Affairs, said: “Being early in this game is important. Right now, the US and the EU are not even in the game.”
The West’s ability to impose sanctions on rogue nations may also be undermined by the development of CBDC-based payment systems because they sidestep two key mechanisms crucial to the sanctions process – the worldwide Swift payment network and the use of banks as intermediaries.
Professor Sabyasachi Kar, Reserve Bank of India chair of the Institute of Economic Growth at the University of Delhi, told S&P Global Market Intelligence: “The current conflict [in Ukraine] and sanctions have changed these calculations significantly. The West now realises that without a CBDC, it will be very difficult for them to ensure that their interests are preserved.”