The European Central Bank (ECB) is advancing the development of a wholesale central bank digital currency (CBDC) payment system designed to facilitate transactions between financial institutions. This initiative, announced on February 20, will unfold in two phases: initially developing the CBDC settlement platform, followed by deeper integration with existing ECB systems like foreign currency exchanges. ECB executive member Piero Cipollone emphasized that the initiative aims to create a more cohesive European financial ecosystem. The ECB has been exploring various CBDC forms since 2020, including retail digital euros and cross-border settlements. Amidst regulatory challenges, the ECB remains committed to ensuring that state-issued currencies can compete with privately issued stablecoins and cryptocurrencies. ECB President Christine Lagarde expressed confidence in central banks under the eurozone system, asserting that Bitcoin is too volatile to serve as a reliable reserve asset for banks in Europe.

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