Digital euro billing, distribution options detailed in the latest progress report
Digital euro billing, distribution options detailed in the latest progress report
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Progress towards the creation of a digital euro continues, and the European Central Bank (ECB) has documented this in a second progress report, detailing design and deployment options recently approved by its Governing Council. The report addressed four key issues that roughly correspond to the timeline the ECB has set itself, which culminates in a provisional decision on whether to move from the investigation to the implementation phase in the third quarter of 2023.
The report outlined the roles of the Eurosystem and intermediaries, noting that supervised intermediaries are responsible for all administrative and user-facing functions in the system. The Eurosystem central banks would review and record transactions, correcting errors in the process and taking responsibility for their accuracy. Nonetheless, “the digital euro would be designed in such a way as to minimize the Eurosystem’s involvement in the processing of user data,” the report states.
Offline peer-to-peer transactions using validated digital euros could be settled in a digital storage device and later “verified and recorded by secure elements in hardware devices”.
In January 2023 the @ecb invites market participants to participate in market research in order to get an overview of the possibilities of the technical design of possible digital euro components and services #CBDC https://t.co/c2GIL5Mapg
— Central Bank Payments News (@cbpaymentsnews) December 16, 2022
The ECB is not committed to blockchain technology, the report states:
“The Eurosystem could rely on either traditional technology, distributed ledger technology or a combination of both for settlement activities. The Eurosystem has not yet made a decision on which technology would be most suitable for a digital euro.”
Funding and repayment (converting money to and from digital form) should include mechanisms to settle transactions that exceed limits set on digital currency accounts, with automatic access to holders’ bank accounts.
Related: The European Central Bank selects Amazon and 4 other companies as prototypes for a digital euro app
The equitable distribution of the digital euro would require a set of pan-European rules, standards and procedures, forming a “scheme”, the report says. The goal of the scheme will be that:
“Paying with digital euros should always be an option, regardless of which company end-users open digital euro accounts or wallets with, and regardless of their country of origin.”
After a year of work, the ECB published its first progress report on the digital euro in September.
