The ECB has finalized its digital euro prototype plan as it considers whether to roll out a government-backed token.
The European Central Bank (ECB) has finalized a digital euro prototype ahead of a development decision. Later this year, major central banks will decide whether or not to develop a digital version of the fiat euro.
as of friday reportsThe ECB examined distributed ledger technology and smart contracts as key components of a potential digital euro. However, the governing bank has reservations about using decentralized-influenced smart contracts.
The ECB’s findings on its digital euro prototype came in two publications, namely market research And prototype exercise,
ECB Executive Board members explain in detail the findings of the digital euro prototype plan
Commenting on the broad scope of the Eurozone bank’s investigative phase, Fabio Panetta, Member of the Executive Board of the ECB Explained,
“This exercise shows that it is possible to seamlessly integrate digital euro design options into the existing payments landscape while leaving ample room for innovative features and technologies.”
recently Letter Irene Tingle, Chair of the Economic and Monetary Affairs Committee (ECON), Panetta said:
“The feedback received has helped Eurosystem to better understand the current level of market knowledge and existing experience in building solutions, and to identify suitable technologies for potentially implementing the digital euro.”
The member of the ECB’s executive board concluded that the exploratory phase would shape the functionality and design of a potential euro.
“The findings of the prototyping exercise and our market research will serve as input for both the functional and technical design of the digital euro. These reports can be shared with ECON members of the European Parliament under embargo,” Panetta said.
Eurosystem invited several market participants to participate in its “learning experiment”, which resulted in the use of prototypes as research tools. Nonetheless, the eurozone’s monetary authority said that market research helped to understand industry-specific knowledge. Eurosystem also said that it has gained invaluable experience in developing potential digital euro technical solutions.
ecb cbdc prototype exercise
The ECB will conduct its digital euro prototype exercise between July 2022 and February 2023. The exploratory phase began nine months after the ECB’s Governing Council gave the green signal to the digital euro project. During this period, the Eurosystem Prime Component researched various use cases for a central bank digital currency (cbdc,
The exercise involved the integration of five user interfaces developed by different providers for various experimental reasons. In addition, Eurosystem also created a single settlement system to serve as a back-end prototype. However, the monetary authority said it developed the back-end and front-end (five user interfaces) prototypes for research purposes only. As a result, none of the prototype classes processed any personal data during the exercise. In addition, Eurosystem does not intend to use the developed prototype after the conclusion of the experiment.
Member of the Executive Board of the ECB considered the possibility of issuing a digital euro
The ECB has considered the possibility of issuing a digital euro as a way to enhance European payments as CBDCs explode in popularity. Pennetta addressed the European Parliament in Brussels in March, emphasizing the digital euro user optics. At the time, a member of the ECB’s executive board said that a CBDC would add value to end users.
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