Digital Euro Prototypes Wrapped Up: ECB Decision on Development Awaits
• The European Central Bank (ECB) has released two reports on its digital euro project, including market research and prototyping exercises.
• The research suggests that there is a large pool of European providers capable of developing digital euro solutions.
• Tests concluded that it is possible to smoothly integrate a digital euro into the existing payment landscape.
European Central Bank Investigates Digital Euro
The European Central Bank (ECB), which serves as the central bank of the European Union, has launched an investigation into a potential digital euro. As part of this investigation, the ECB conducted market research and prototyping exercises to gain insight into industry-specific knowledge and experience in building technical solutions for a digital euro.
Market Research Findings
The market research indicated that there is a sufficiently large pool of European providers able to develop digital euro solutions. It also suggests that different types of architectural and technological design options are available to build a technical solution for a digital euro.
Prototyping Exercise Results
Between July 2022 and February 2023, the ECB carried out a prototyping exercise on what paying with a digital euro could be like for various use cases. This exercise involved integrating five user interfaces developed by different providers with a settlement system designed by the Eurosystem. Tests concluded that it is possible to smoothly integrate a digital euro into the existing payment landscape while still leaving scope for innovative features and technologies when distributing it.
Decision Awaited
The Governing Council of the ECB will decide in autumn 2023 whether or not to proceed with further development and testing of an EU-wide designed central bank digital currency.
Conclusion
The results from both the market research and prototyping exercises suggest that it may be feasible to technically implement and integrate a digital euro into existing systems, leaving room for innovation when distributing it once ready. A decision on further development awaits in autumn 2023