Europe Prepares for Digital Euro With New Tech Deals

The European Central Bank has signed agreements with several technology providers today as part of preparations for a potential digital euro. 

The agreements cover parts of the central bank digital currency, including fraud prevention, risk management, secure exchange of payment information, and software development.

Big Tech Joins the Digital Euro Team

According to the Thursday notice, Seven companies have already been named, with at least one more expected to be added. Among the selected firms are Feedzai, a company that uses artificial intelligence to detect fraud, and security technology group Giesecke+Devrient, known for its work in payment systems and banknote production.

“Following the framework agreement conclusion, G+D and other successful tenderers will work with the ECB to finalize planning and timelines,” said Dr. Ralf Wintergerst, chief executive officer of Giesecke+Devrient. 

He added that under the guidance of the ECB Governing Council, the work will cover design, and development of the Digital Euro Service Platform.

The agreements do not involve any financial payments at this stage, the ECB clarified, and contain safeguards that allow changes if European legislation requires adjustments. According to the bank, the actual development of components will be decided later, depending on the Governing Council’s approval of the next project phase.

Services under the new deals will include “alias lookup,” a function that allows digital euro users to send or receive money without having to know the full details of the other person’s payment service provider. Giesecke+Devrient will also work on offline payment solutions, enabling users to make or receive digital euro transactions without an internet connection.

What’s Next for the Digital Euro?

The digital euro project was first launched in 2021 and entered its preparation phase in 2023. While no decision has been made to officially launch the currency, an ECB official recently suggested that 2029 could be a possible date for a rollout.

The project comes at a time when European regulators are raising concerns over the impact of stablecoins. ECB President Christine Lagarde said in September that EU lawmakers need to address risks posed by stablecoins issued by firms under the region’s Markets in Crypto-Assets framework, as well as those coming from outside the European Union.

Separately, the European Systemic Risk Board passed a recommendation urging a ban on certain jointly issued stablecoins, although the measure is non-binding. Officials argue these tokens could create risks for financial stability if left unchecked.

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