ECB Allocates $1.3 Billion for Retail Digital Euro Development
Date: 2024-01-14 Author: Dima Zakharov Categories: CRYPTO PAYMENTS
The European Central Bank (ECB) has made a groundbreaking move in the world of digital currencies by allocating a substantial budget of €1.2 billion for the development of features aimed at enhancing offline payments for the retail digital euro. This initiative comes as the ECB continues to explore the potential introduction of a digital euro, aligning itself with the global trend of central bank digital currencies (CBDCs).
The ECB is actively seeking providers for various functions, including risk management, cybersecurity, and user applications. More than half of the allocated budget will be directed towards the development of offline payment services, highlighting the ECB's commitment to advancing this critical aspect of CBDC implementation.
While the €1.2 billion budget may seem substantial, industry experts view it as a reasonable investment considering the ECB's ambitions in the digital currency space. Additionally, a significant portion of the budget is earmarked for potential providers of the autonomous component of the CBDC, underscoring the seriousness of the effort and the need for expert knowledge to address remaining challenges.
Offline payments play a pivotal role in the rollout of CBDCs, and the ECB plans to introduce two digital euro versions for retail payments, one of which will be exclusively for autonomous use. Experts anticipate that both versions will be accessible through a single application, but developing such a user-friendly product poses potential complexities.
The selection of service providers remains an open question, especially after the ECB faced criticism in 2022 for choosing American tech giant Amazon to create an e-commerce prototype for the digital euro. This time around, experts speculate that the ECB may lean towards traditional financial players with a presence in Europe.
These developments come after the ECB moved its digital euro project into the "preparatory phase" in October 2023, focusing on refining the rulebook and selecting service providers. The decision to launch the digital euro awaits the completion of legislative approval in the European Parliament.
