In an interview with the ECB, she discussed the Markets in Crypto-Assets Regulation (MiCA), saying that it is important to remember that "even with the implementation of MiCA, which is clearly a step forward, there will be no such thing as a safe cryptoasset. Consumers need to be aware that MiCA does not provide the same protection as for traditional financial products."

The report also sets outs key principles of a compensation model for the distribution of a digital euro and gives an update on other ongoing areas of work. In addition, it looks at the results of the prototyping exercise and the market research on technical solutions for a digital euro.

The compensation model seeks to create incentives for banks and payment service providers to distribute digital euro and to ensure that digital euro payments will be free of charge and widely accepted across the euro area.

The Eurosystem is also analysing how digital euro can be transferred from an individual’s personal wallet to another one, as well as how to prevent and detect fraud in digital euro payments.

Based on the result of the investigation phase, the Governing Council of the ECB is to decide whether to start testing and developing a digital euro in the autumn of 2023. A digital euro would only be issued with the support of European institutions. 

In June 2023, the ECB welcomed the European Commission’s legislative proposals on digital euro and on the legal tender status of euro cash and is ready to provide technical input to support the work of the EU co-legislators. 

The ECB also published a letter by Member of the Executive Board Fabio Panetta to Irene Tinagli, Chair of the Committee on Economic and Monetary Affairs (ECON), regarding the fourth progress report.

The ECB also welcomed the Commission's proposal to protect the legal tender status of euro cash.

The Governing Council of the ECB will decide in autumn whether to move to the next phase of digital euro project. In this next phase, the ECB would further develop and test the technical solutions and business arrangements. A possible decision by the Governing Council to issue a digital euro would be taken only after the legislative act is adopted.

Commenting on the proposals, ECB President Christine Lagarde said: “The euro is the most tangible symbol of European integration. It is highly valued and trusted by citizens. We look forward to continuing working together with other EU institutions towards a digital euro to ensure our currency is fit for the digital age.”

Executive Board member Fabio Panetta, who chairs the High-Level Task Force on a digital euro, said: “The legislative proposal is key to ensuring that the digital euro brings value to the people, taking the appreciated features of cash into the digital sphere. The ECB also welcomes the Commission’s proposal on the legal tender status of euro cash, to ensure banknotes remain easily accessible for citizens and businesses and widely accepted throughout the euro area.”