The European Commission is planning to put forward a proposal for regulation to establish a digital euro in the second quarter of 2023.

The European Central Bank (ECB), which revealed the plans in a new report, said that the Commission has already started legislative preparations.

The move comes after the ECB and euro area national central banks launched the investigation phase of the digital euro project in October 2021.

The investigation phase includes a prototyping exercise to test how well potential back-end solutions developed by the Eurosystem could be integrated with front-end prototypes.

The prototyping exercise is expected to be completed in the first quarter of 2023 when the ECB will also publish its findings.

Earlier this year the central bank published research on attitudes towards digital payments as part of its investigation into a digital euro.

The report revealed a “strong preference” for payment methods with pan-European reach and universal acceptance in physical shops and online.

The study also found that users favour payment solutions that are convenient, fast and easy to use. Participants valued the possibility of instant and contactless person-to-person payments, regardless of the platform or device.

Respondents of a focus group wanted a “one-stop-solution” that would incorporate all the current payment options into one system.

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