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The European Central Bank (ECB) said it will move from discussion to exploration in its plans to develop a digital euro.
- The ECB decided to start the investigation phase of a euro-zone central bank digital currency (CBDC), an announcement Wednesday said.
- The ECB has been discussing the potential launch of a central bank digital currency (CBDC) for the 19 euro countries since the beginning of this year. President Christine Lagarde said in March that one could be launched within four years.
- A digital euro would be a means to complement cash, not replace it, the ECB has stressed previously. Research by the central bank last year highlighted a drop in the usage of cash since 2019, with the COVID-19 pandemic attributable for an acceleration in the long-term decline.
- The move from discussion to exploration of a CBDC is one that numerous other central banks including those of the U.K. and Japan have made in the last year.
- Among major economies, China leads the way in its advancement of CBDC plans. South Korea and Sweden both appear to have moved from exploration to testing in recent months.
