EU Focuses CBDC Initiatives on Personal Over Business, Web3

In the European Union, the initial stage of a digital euro and potential use cases for a central bank digital currency (CBDC) will target personal use over business processes and Web3 advancement.

“We have singled out, for the first release of the digital euro, three use cases,” Evelien Witlox, digital euro program manager at the European Central Bank, said at an event hosted by the European Economic and Social Committee (EESC), a body that advises the EU government.

Speaking on a panel discussion at the conference, Witlox pointed to the three immediate areas up for advancement: peer-to-peer, consumer-to-business and payments to or by governments.

Initially, a retail digital euro would not be authorized for use in settling invoices, issuing paychecks or in decentralized finance. Instead, the focus will be concentrated on payments initiated by people, according to the EESC’s information.

See also: Why EU Regulators, Policymakers Are Betting on a Retail CBDC

The EU hasn’t taken an official stance on issuing a CBDC, nor has it decided whether operating across the blockchain is the way to proceed if they do move forward with a digital coin. Issues such as enabling digital alternatives to banknotes and coins are addressed in a bill set for publication in early 2023, CoinDesk reported Wednesday (Sept. 7) .

“Whether or not blockchain will be used as a technology is currently not in the investigation phase,” Witlox said, adding, “Technology should not drive the functionality.”

Read more: How the Digital Euro Can Help Address Disintermediation, Sovereignty Issues

European Commission heads have been tasked with proposing the draft laws that could underpin a digital euro. Because the CBDC is supposed to be future-proof and ease into Web3, those working on the project are targeting results over speed.

“A digital euro needs to meet new payment needs … we need to also be open and adjust and cater for those [Web3] users,” Jan Ceyssens, head of the digital finance unit at the commission, said at the same event.

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