The digital euro is a proposed central bank digital currency (CBDC) for the Eurozone. It’s a digital version of the euro, issued directly by the European Central Bank (ECB) and designed to be used alongside physical cash. cbdc euro

The European Central Bank (ECB) will collaborate with five companies to develop potential user interfaces for the digital euro. The aim of this prototyping exercise is to test how well the technology behind a digital euro integrates with prototypes developed by companies. cbdc euro

Simulated transactions will be initiated using the front-end prototypes developed by the five companies and processed through the Eurosystem’s interface and back-end infrastructure. There are no plans to re-use the prototypes in the subsequent phases of the digital euro project.

ECB and Third-Party Companies Work Together on the Digital Euro cbdc euro

• peer-to-peer online payments – CaixaBank;
• peer-to-peer offline payments – Worldline;
• point of sale payments initiated by the payer – EPI;
• point of sale payments initiated by the payee – Nexi;
• e-commerce payments – Amazon.

The firms have been chosen from a pool of 54 front-end providers. Their selection follows the April 2022 call for expressions of interest in joining the prototyping exercise. All 54 companies fulfill a number of “essential capabilities” that were outlined in the call, while the five providers chosen best matched the “specific capabilities” required for the assigned use case. The ECB appreciates the wide interest shown in the prototyping exercise.

The prototyping exercise is an important element in the ongoing two-year investigation phase of the digital euro project. It is expected to be completed in the first quarter of 2023, when the ECB will also publish its findings.

Key points about the digital euro:

• Electronic payment method: It would be available for use in electronic payments, similar to existing digital payment methods but with the backing of the ECB.
• Available to everyone: The goal is to make it accessible to all individuals and businesses within the Eurozone.
• Complementary to cash: It would not replace physical euro banknotes and coins but offer an additional payment option.
• Secure and private: The ECB aims to ensure the digital euro is secure and respects user privacy.

Why a digital euro?

• Digital transformation: It’s seen as a way for the euro to keep up with the increasing digitization of society and the economy.
• Financial inclusion: It could provide a digital payment option for those who don’t have access to traditional banking services.
• Innovation: It could foster innovation in digital payments and financial services within the Eurozone.

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