FRANKFURT, Oct 18 Reuters The European Central Bank took a further step on Wednesday towards launching a digital version of the euro that would let people in the 20 countries that share the single currency make electronic payments securely and free of charge.

The ECB said it would start a twoyear preparation phase for the digital euro on November 1, in which it would finalise rules, choose its privatesector partners and do some testing and experimentation.

After two years, the Governing Council will decide whether to move to the next stage of preparations, to pave the way for the possible future issuance and rollout of a digital euro, the ECB said.

While Wednesday39;s decision is a small step in a multiyear project, it sets the ECB ahead of the other central banks of the Group of Seven G7 wealthy nations and it may constitute a blueprint for others to follow.

A number of Caribbean countries and Nigeria have already launched digital currencies while China and Sweden are among those that have rolled out pilot projects.

But the Fed, the Bank of England and the Bank of Canada, have all been more cautious on such projects.

The digital euro will be for most intents and purposes like any online wallet or bank account except it will be free to use and guaranteed by the ECB rather than a private company, making it safer.

But the project has its fair share of critics, chiefly bankers and regulators who fear it will take deposits away from the commercial sector, but also…