The digital euro gets a rulebook

The ECB's two-year investigation phase on the digital euro will end this autumn. Subsequently, it will be decided whether and in what form the digital euro will be implemented. The ECB plans to organise the distribution of the digital euro through a scheme that will set rules and guidelines for its introduction and distribution. Earlier this year, the ECB established a Rulebook Development Group (RDG) to produce a first draft of a scheme rulebook. This first draft could be particularly interesting for commercial banks and payment service providers, as the ECB would like to process the distribution of the digital euro through them.

Composition and tasks of the RDG
The Rulebook Development Group's task is to create a preliminary scheme rulebook for a potential digital euro. It is composed of 22 experienced professionals from the private and public sectors. This includes 8 Eurosystem representatives and 14 representatives from various payment market stakeholder organisations, ensuring that the different perspectives and needs of all stakeholders are considered.

Contents of the rulebook
The rulebook provides a framework to which all intermediaries involved in the introduction and distribution of the digital euro are bound. It includes the following aspects:
  • Basic characteristics of the scheme
  • Functional and operational model
  • Compliance (adherence)
  • Technical requirements
  • Risk management
  • Scheme management

In developing the rulebook, the Research Development Group is guided by the design options endorsed by the Governing Council, which are explained in the so-called progress reports during the investigation phase. These are accessible via the ECB's website digital euro publications.

Importance of a scheme rulebook for the digital euro
A scheme rulebook creates uniform standards for the introduction and distribution of the digital euro, which can improve the interoperability and efficiency. It provides clarity and transparency to intermediaries and also to the users of the digital euro, which reduces misunderstandings and uncertainties during the implementation and strengthens trust in the digital euro. The design of the rulebook can also be crucial for a smooth introduction and distribution. To this end, flexible rules and a low level of bureaucracy are particularly important to enable an uncomplicated onboarding for all intermediaries.

Potential for innovative services
The rulebook also influences the development of additional and innovative services that can be offered with the digital euro. Depending on its design, the rulebook can be an important basis for commercial banks and licensed intermediaries to develop additional services beyond the original scope of application. In this respect, the inclusion of stakeholders from different sectors of the private sector raises hope. Innovative services could be decisive for the future success of the digital euro. This is because there is still a lack of clear unique selling points that distinguish the digital euro from existing payment instruments such as card payments with commercial bank money.

A decision on the introduction of the digital euro can only be made once a legal framework has been adopted at European level, which is unlikely to happen in the last six months of the investigation phase. In any case, important announcements can still be expected in this final phase. In order to prepare in the best possible way, it is advisable to deal with the topic intensively now and not just if the introduction is imminent. One thing is certain: PPI will continue to follow the developments on the digital euro with enthusiasm and will continue to keep you informed of the most important developments.

Author: Alois Brügge, Philipp Schröder


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