ECB Puts Digital Euro on Frontline for Crisis Resilience

ECB Says Digital Euro a Necessary Tool During Major Disruptions In a move to ensure business continuity during major disruptions, the European Central Bank (ECB) has emphasized the importance of a digital euro as a necessary tool. According to ECB board member Piero Cipollone, a digital euro would be required to enable users to make payments even in the event of a cyberattack on banks or other payment providers. A digital euro app with offline functionality could provide a failsafe for users during power outages that take regular methods of payment offline. This feature would allow users to continue making transactions without relying on internet connectivity, thereby minimizing disruption to businesses and individuals. The ECB has been exploring the possibilities of a digital version of its currency for several years. A Eurozone central bank digital currency (CBDC) could provide business continuity in the event of a major outage, according to Cipollone. "A digital euro would be a necessary tool to ensure that users can still make payments during major disruptions," he said. The concept of a CBDC is not new, and several countries around the world are already exploring or implementing their own versions. However, the ECB's emphasis on the importance of offline functionality for a digital euro app highlights its focus on ensuring business continuity in the face of potential disruptions. In addition to providing a failsafe during power outages, a digital euro could also offer other benefits, such as increased financial inclusion and improved efficiency in cross-border transactions. However, the development and implementation of a CBDC would require significant investment and coordination among stakeholders. The ECB's emphasis on the importance of a digital euro highlights its commitment to ensuring business continuity and promoting financial stability in the Eurozone. As the world becomes increasingly dependent on digital technologies, the need for robust and reliable payment systems is becoming more pressing. Background The ECB has been exploring the possibilities of a digital euro since 2020, when it launched a public consultation on the topic. Since then, several countries have made significant progress in developing their own CBDCs, including China, Sweden, and Singapore. Current Status While the ECB has not yet announced any concrete plans for implementing a digital euro, its emphasis on offline functionality suggests that it is moving closer to making a decision. The development of a CBDC would require significant investment and coordination among stakeholders, but the potential benefits could be substantial. Next Developments In the coming months, the ECB is expected to provide further updates on its plans for a digital euro. As the world becomes increasingly dependent on digital technologies, the need for robust and reliable payment systems is becoming more pressing. The development of a CBDC would be an important step towards ensuring business continuity and promoting financial stability in the Eurozone. Attribution Quotes from Piero Cipollone, ECB board member, are attributed to the European Central Bank's official website. *Reporting by Coindesk.*