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    European Central Bank Selects Service Providers for Potential Digital Euro Launch

    Ethan CarterBy No Comments3 Mins Read
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    The European Central Bank (ECB) has initiated agreements with technology providers as it prepares for a potential digital euro launch, focusing on components related to the central bank digital currency (CBDC).

    In a notice released on Thursday, the ECB announced agreements with seven entities, with at least one more expected to be revealed, to offer services for fraud and risk management, secure payment information exchanges, and software development pertinent to a potential digital euro. Among the selected companies are Feedzai, known for AI-driven fraud detection, and the security firm Giesecke+Devrient.

    “After finalizing the framework agreements, G+D and other awarded bidders will collaborate with the ECB to complete the planning and timelines,” stated Dr. Ralf Wintergerst, CEO of Giesecke+Devrient. “This collaboration will occur under the supervision of the ECB Governing Council and adhere to EU regulations, addressing the design, integration, and development of the Digital Euro Service Platform.”

    Digital Currency, Euro, European Union, CBDC
    Agreements with technology companies for managing risk and fraud associated with the potential digital euro. Source: ECB

    Since 2021, ECB officials have been examining a possible digital euro rollout, transitioning into the preparation phase by late 2023. Although the Thursday update indicated that the central bank would finalize its decision on launching the CBDC “once the Digital Euro Regulation has been adopted,” an ECB official suggested that a launch by 2029 could be feasible.

    Related: One-third of central banks hesitant on launching CBDCs due to regulatory issues

    According to the ECB, “The actual development of the components — or parts thereof — will be determined at a later date, contingent upon the ECB Governing Council’s decision regarding the subsequent phase of the project.” The framework agreements entail no payments at this stage and include provisions that allow adjustments in response to legislative changes.

    The technological services also encompass “alias lookup,” enabling digital euro users to send or receive funds “without requiring details of the other end-user’s Payment Service Provider.” Giesecke+Devrient is further tasked with developing functionality that allows users to make or receive payments in digital euros while offline.

    EU authorities voice concerns over stablecoin risks

    As the digital euro initiative progresses, officials from the ECB and EU financial regulators have expressed concerns about potential risks posed to local markets by certain stablecoins. This stance contrasts with that of the US, where Congress members and President Donald Trump enacted a stablecoin bill in July, establishing a regulatory framework for these cryptocurrencies.