An expression of interest was launched last April and five companies have been selected from a pool of 54 front-end providers.3 This will allow us to test end-to-end transactions for different use cases, both online and offline. This prototype, which is expected to be completed in the first quarter of 2023, is only relevant for investigation purposes, and there is no plan to reuse it in a production environment. We are now halfway through the investigation phase and our aim is to complete it by the end of next year. Then, the Governing Council will decide whether to move into the implementation phase, in which technical solutions and business arrangements for a digital euro would actually be developed and tested with a view to their potential launch. The promotion of innovation and the Spanish experience with a sandbox The direct provision of payment services, as would ultimately be the case with the digital euro, is not the only strategy or tool that central banks have to respond to increasing digitalisation and use of new technologies by the financial sector. The instruments adopted by each supervisor or regulator differ depending on whether they are more focused on maximising the benefits stemming from digital innovations or on mitigating their potential risks. For instance, as MiCA illustrates, regulation could be useful to curb these risks, but the authorities may also hamper innovation in a jurisdiction, should the regulations not be well calibrated.
6/6  BIS - Central bankers' speeches