HomeNewsCBDCSouth Africa Sets Sights on Stablecoins and Blockchain to Revolutionize Digital Payments

South Africa Sets Sights on Stablecoins and Blockchain to Revolutionize Digital Payments

Date: 22 February, 2024

Key Points:

  • The ECB is actively developing the digital euro, a CBDC aimed at transforming financial transactions in the EU.
  • Recent blog posts from the ECB debunk common myths about the digital euro, addressing concerns about its release.
  • As of November 2023, the digital euro is in its preparation phase, designed to function securely like physical cash.
  • The timeline began in 2020 with the ECB’s announcement of investigations into a retail CBDC, followed by a two-year investigation phase in 2021.
  • A digital euro prototyping exercise in December 2022 explored integration into market ecosystems, completed in early 2023.
  • Findings in April 2023 revealed accessibility through existing banking apps and a dedicated Eurosystem app for residents, governments, and merchants.
  • Cross-border transactions were considered, exploring collaborations with countries having their CBDCs.
  • A June 2023 proposal by the European Commission outlined legal frameworks supporting the digital euro rollout, emphasizing coexistence with physical cash.
  • Approval from the European Parliament and Council is required before the digital euro can go live.
  • In October 2023, the ECB initiated a two-year preparation phase focusing on accessibility, interoperability, and security.
  • January 2024 saw the ECB calling for vendor applications for fraud prevention, secure payment information exchange, etc., with contracts potentially exceeding €1 billion.
  • In February 2024, the ECB announced the development of a digital euro framework, contingent on approval from EU governments.

The European Central Bank (ECB) has been diligently working on developing the digital euro, a central bank digital currency (CBDC) poised to revolutionize financial transactions in the EU. Despite encountering some hurdles, the ECB recently dispelled common myths surrounding the digital euro in a blog post, aiming to allay fears about its imminent release.

Stablecoins and Blockchain

Let’s delve into the fundamentals of the digital euro, currently in its preparation phase as of November 2023. This CBDC, akin to physical cash, is designed to be secure, backed by central banks, and easily stored in users’ digital wallets for seamless transactions.

The timeline of the digital euro traces back to 2020 when the ECB announced investigations into a retail CBDC. In 2021, the two-year investigation phase commenced, leading to a digital euro prototyping exercise in December 2022. Completed in early 2023, the experiment explored integrating the CBDC into market participants’ ecosystems.

Findings in April 2023 revealed that the digital euro would be accessible through existing banking apps and a dedicated Eurosystem app, catering to residents, governments, and merchants. Cross-border transactions were also on the agenda, exploring collaborations with countries possessing their CBDCs.

A June 2023 proposal by the European Commission outlined legal frameworks supporting the digital euro rollout, emphasizing its coexistence with physical cash. However, approval from the European Parliament and Council is necessary before the digital euro can go live.

In October 2023, the ECB initiated a two-year preparation phase, focusing on accessibility, interoperability, and security. The goal is to establish a secure pan-European payment system for both online and offline transactions. In January 2024, the ECB called for vendor applications to provide services such as fraud prevention, secure exchange of payment information, and more, with contracts potentially exceeding €1 billion.

In February 2024, the ECB announced the development of frameworks for the digital euro, contingent on approval from EU governments. Notably, the ECB emphasized reliance on European suppliers for building the digital euro ecosystem.

Despite the extensive progress, the rollout of the digital euro is not imminent. The ECB confirmed in September 2022 that the earliest launch would be in 2026. However, Banque de France suggests that the issuance timeline could extend to 2027 or 2028, contingent on legislative definitions surrounding the digital currency. Stay tuned for further updates on Stablecoins and Blockchain.

References:

https://www.finextra.com/the-long-read/954/eu-cbdc-what-do-we-know-so-far-about-the-digital-euro

Learn more about Stablecoins and Blockchain at rue-dex.com

PHP Code Snippets Powered By : XYZScripts.com