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As part of the investigation phase of its Digital Euro project, the European Central Bank (ECB), which acts as the central bank of the European Union, has released two reports on the institution’s market research and prototyping exercises.
The Eurosystem, which includes the ECB and the national central banks of EU countries whose currency is the euro, invites market participants to participate in market research.
This was to allow them to “gain an understanding of industry-specific knowledge and ongoing experience creating potential technical solutions for the digital euro”.
Research indicates that there is a sufficiently large pool of European providers capable of developing digital euro solutions. It also suggests that a variety of architectural and technical design options are available to build technical solutions for a digital euro,” the Frankfurt-based bank said in a statement. statement,
Between July 2022 and February 2023, the ECB conducted a prototype exercise on payments with the digital euro for various use cases.
The exercise involved the integration of five user interfaces developed by several providers for each use case (front-end prototype), as well as settlement systems designed and developed by Eurosystems (back-end prototype).
According to the statement, various design options were put to the test to determine whether it could be technically implemented and integrated into the Eurosystem’s settlement plan.
“The tests concluded that it is possible to integrate the digital euro smoothly into the existing payments landscape, while still leaving scope for the market to use innovative features and technologies when distributing the digital euro. The findings also confirm do that in a digital euro, in principle, work online and offline using different technical designs,” the ECB said.
Meanwhile, the question remains whether an offline solution that complies with Eurosystem requirements and delivers the required scale can be delivered in the short to medium term with existing technology, the bank concluded.
The European Union launches its digital euro project in October 2021. The Governing Council of the ECB is due to decide in the autumn of 2023 whether it wants to proceed with a preparatory phase to develop and test an EU-designed central bank digital currency.cbdc,
“If the Governing Council chooses to go ahead with the preparatory phase, this does not mean that it will issue a digital euro. The Governing Council will take a dedicated decision on whether to issue a digital euro at a later stage,” K. According to bank.