Second progress report on the digital euro preparation phase (ECB)
The European Central Bank (ECB) published its 2nd progress report on the preparation phase of a digital euro, which was launched on November 1, 2023. Since the publication of the 1st progress report, the ECB has updated its digital euro scheme rulebook, aimed at harmonizing digital euro payments across the euro area. Also, the ECB has concluded a call for applications for selecting potential providers of digital euro components and related services, and started user research and experimentation activities, to gather insights into users’ preferences and to inform design decision-making. In addition, along with with key stakeholders, the ECB will be exploring innovative use cases for the digital euro, including conditional payments. In parallel, the ECB is working with Eurosystem national central banks and other competent authorities to develop a methodology for setting digital euro holding limits. [Read more at the ECB]
Can the Digital Euro be made attractive to all key stakeholders? (Michael Salmony)
Michael Salmony posted a paper that explores the challenges and opportunities related to the adoption of central bank digital currencies (CBDCs) with a particular focus on the Digital Euro. It critically addresses the often unclear problems CBDCs are intended to solve, and emphasizes the necessity of motivating key stakeholders, especially commercial banks, consumers, and merchants, to support and use them. It argues that simply mandating adoption is insufficient for success; instead, intrinsic motivation and clear business cases for each stakeholder group are essential. Additionally, the article proposes that an offline CBDC, resembling a modern form of cash, might offer a viable path forward, providing benefits such as increased financial inclusion and enhanced privacy. [Read more at ResearchGate]
The real story behind the death of Meta’s Libra: A “political kill”? (X.com)
David Marcus, the former head of Diem (formerly Libra) at Meta, posted the chain of events that led to the death of the Diem blockchain-based payment network that was announced in 2019. According to his timeline, after two years of negotiations with regulators, they got to the cusp of approval by the U.S. Federal Reserve (Fed) of a limited rollout. However, the Fed got “cold feet” about the project, allegedly on warnings from Treasury Secretary Janet Yellen that it would be “political suicide” to approve it. Shortly thereafter, letters went out from U.S. government authorities to all the regulated Diem’s partners to expect a high level of scrutiny on all payment activities. At that point, partners started to dropped their support and Diem eventually folded in 2022. Marcus’s statements come after allegations of tech founders being debanked as part of the U.S. authorities’ “Operation Chokepoint 2.0”. [Read more at X]
Sponsored Content:
Supercharge your CBDC research and deployment strategy with Chavanette’s Alpha Knowledge Platform (⍺LP)—the ultimate resource for deep insights into CBDCs and the ecosystem of CBDC technology providers and solutions. Get insider access to the top 20 CBDC platforms through the GALACTIC GRID, dissected by Chavanette’s expert framework. Lead the digital central banking revolution with the tools necessary to deploy Central Banking 4.0—stay informed, stay bold, stay transformative. Be the leader. Register for access here and get a 10% discount on the first year with the kiffmeister10 code.
Upcoming Speaking Engagements:
- Digital Euro Conference 2025, Frankfurt, March 27, 2025. The DEC25 conference will explore the future of money with a focus on CBDCs, stablecoins, tokenized deposits, and the intersection of AI and digital ID. When you register, get 20% off the regular ticket price by using the Kiffmeister20 code! [Find out more and register here]
And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.
