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According to Cointelegraph, the European Central Bank (ECB) has published its second progress report on the preparatory phase for the issuance of a digital euro. The report addresses key issues such as holding limits for the central bank digital currency (CBDC) and the harmonization of laws across member states.The report marks the midpoint of the preparatory phase, which follows the investigative and design stages. The ECB has reviewed the developing digital euro rulebook, leading to the establishment of seven workstreams involving market participants and central banks to further its development. The rulebook aims to harmonize national laws to ensure universal standards, with a progress report released in September and another expected in July 2025.Research is ongoing to develop a digital euro user profile, focusing on identifying the needs of potential users. This includes user preferences on holding limits, which will be considered in technical research conducted with national central banks. Politico reported in October that holding limits have become a contentious issue between the ECB and national central banks. One proposed solution is a "reverse waterfall" mechanism that would automatically transfer excess digital euros to fiat currency in a linked bank account. The report also mentions ongoing investigations into solutions for offline transactions, though details remain sparse.A significant topic in the report is the competition in the financial market between European and non-European service providers and the need for enhanced technical services, such as digital wallets. The report highlights that payment service providers (PSPs) could leverage the digital euro infrastructure to develop new payment services. Additionally, a digital euro could assist regional and domestic European schemes in scaling up their payment offerings using the digital euro acceptance network.The report also suggests potential improvements to the user experience of the digital euro, allowing citizens with a strong preference for privacy to enjoy cash-like privacy features. In February, ECB executive board member Piero Cipollone assured that the digital euro would offer a higher standard of privacy than current commercial solutions.The selection of technical service providers will continue, alongside ongoing communications with the public and other stakeholders. The ECB plans to release the next digital euro progress report in the second quarter of 2025, with the ECB Governing Council potentially deciding on the launch of the European CBDC in October 2025.