Although it has not yet decided whether to adopt a digital euro, the ECB already believes that a CBDC should prioritize online payments and peer-to-peer transactions.

In a recent online publication, the Eurosystem banking entity explained that other possible uses of the digital euro should come after effective support for online transactions.

Secondary roles for a CBDC may include taxation, welfare payment income, and transaction payments.

The ECB publication, titled "Rooting a Digital Euro", provides comprehensive and insightful insights into the prospects for a digital euro. This online publication presents a chronology of CBDC development, from inception to proposed rollout and use cases.

Furthermore, the document concludes by welcoming feedback on the Digital Euro project in its ongoing development.

According to the ECB Digital Euro Team, a CBDC must have multiple applications to address user needs and market gaps.

The team also added that "in practice, a staggered approach will help ensure a smooth end-user payment experience."

In addition, the ECB’s digital euro unit explained that the aforementioned approach would also reduce the complexity of implementation.

Actions such as trying to roll out or implement new systems all at once should become easier, the department said.

Recent online publications have highlighted that the use of e-commerce and payments between friends should be the first use cases for CBDC.

Meanwhile, ECB officials believe that decentralized finance (DeFi) applications for a digital euro should be considered later.

Furthermore, the ECB has previously proposed that private use of the digital euro be free.

However, the leading bank added that new laws could be introduced to prevent banks from charging merchants exorbitant fees.

The ECB is one of several global jurisdictions considering a "centralized" digital currency issuance.

Although the central bank of the European system does not expect to implement it anytime soon, it has already clarified its approach to a digital euro.

For example, amidst the ongoing technological retreat, the ECB explained that the digital euro will not replace fiat money.

Instead, ECB Executive Board member Fabio Panetta explained in a speech to a European Parliament committee last month:

"The digital euro will not replace other electronic payment methods, or even cash. Rather, it will complement them. In doing so, it will uphold our monetary sovereignty while strengthening Europe's strategic autonomy."

Panetta also mentioned that online payments are a perfect use case for the digital euro.

According to him: "Our priorities for the digital euro project have always been clear: to preserve the role of central bank money in retail payments by providing additional options for paying with public funds, including in areas that are not possible today, such as e-commerce .”

The ECB’s digital euro development comes after the European Union postponed a final vote on legislation for crypto asset markets.

In January, reports emerged that the EU would delay its final MiCA legislative vote for the second time in two months.

In the 400-page guiding legal document, the reason for the decision was a technical issue.