Frankfurt, Germany, Tuesday, January 09, 2024- The European Central Bank (ECB) has issued five separate calls for applications to establish framework agreements with potential providers of components and related services for a digital euro, if and when it is launched. This move marks a significant step in exploring the development of a central bank digital currency (CBDC) across the eurozone.1
The proposed components for the potential digital euro infrastructure target specific areas, encompassing the Alias Lookup Component, which streamlines payments by utilizing simple aliases instead of lengthy account numbers.
Another vital aspect is the Fraud and Risk Management Component, designed to offer enhanced support to intermediaries in identifying and managing fraudulent transactions. Additionally, the infrastructure includes the App and SDK Components, featuring a digital euro app and a software development kit (SDK) that aids intermediaries in providing digital euro services through their mobile apps and online interfaces.
The Offline Services Component focuses on delivering engineering and development services to establish an offline bearer payment instrument.
Lastly, the Secure Exchange of Payment Information Component plays a crucial role in supporting the secure conversion of transactional and sensitive information, such as the payment instrument used, upon the request of an intermediary.
While the ECB emphasizes that this is not a commitment to launch a digital euro, it signifies a proactive approach to preparing for such a possibility. The applications will be evaluated based on criteria like technical expertise, security, and compliance with regulatory requirements.
Central banks worldwide are actively exploring CBDCs, aiming to address the potential shortcomings of traditional cash systems and provide alternative payment options. However, concerns around privacy, financial inclusion, and the potential impact on existing financial institutions remain key discussion points.
