Odaily Planet Daily News: The European Central Bank (ECB) has released the second progress report on the preparatory phase for the issuance of the digital euro. The report discusses issues such as the limitations of holding central bank digital currencies (CBDCs) and legal coordination. After reviewing the draft digital euro rulebook, the Rulebook Development Group has initiated seven workflows led by market participants and central banks, which will continue their development. The rulebook aims to coordinate national laws to ensure common standards. A report on its progress was published in September, and another report is set to be released in July 2025. The ECB stated that it is continuing to study the user profiles of the digital euro to determine the needs of potential users. This input will include user preferences for holding limits, which will be considered in technical studies conducted with national central banks. Politico reported in October that holding limits have become a focal point of debate between the ECB and national central banks. To maintain the maximum holding limit, one solution currently being considered is a 'reverse waterfall', which would automatically transfer excess digital euros into a related bank account in fiat currency. The report states that solutions for offline transactions are still under research, but it did not disclose many details. A major theme of the report is the competition between European and non-European service providers in the financial market, as well as the growing demand for more technical services like wallets. The report emphasizes: 'Payment service providers (PSPs) will be able to use the digital euro infrastructure to create new payment services. The digital euro will also help expand the payment services offered by regional and domestic plans, using digital euros for acceptance networks.' The report also notes that 'there may be some improvements to the user experience of the digital euro so that citizens with stronger privacy preferences can enjoy cash-like privacy.' (Cointelegraph)

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