European Central Bank selects possible digital euro launch providers

The European Central Bank (ECB) announced a framework agreement with technology providers responsible for the central bank’s digital currency (CBDC) components as part of the preparation phase for its potential digital euro launch.

In a notice Thursday, the ECB said it had reached an agreement with seven entities (at least expected to be announced) to provide services related to managing fraud and risks, secure exchange of secure payment information, and potentially digital euros. Among the company is Feedzai, which uses AI to detect fraud and security technology company Giesecke+Devrient.

“Following the conclusions of the framework agreement, G+D and other successful bidders will work with the ECB to finalize the plan and timetable,” said Dr. Ralf Wintergerst, CEO of Giesecke+Devrient. “Under the guidance of the ECB’s Management Council, consistent with EU legislation, this work will cover the design, integration and development of the digital euro service platform.”

European Central Bank officials have been exploring potential digital euro promotions since 2021 and have entered the preparation phase by the end of 2023 as part of their plan. Although Thursday’s notice clarified that central bank authorities will only decide whether to initiate the CBDC “once the digital euro regulations are passed,” a ECB official said last week that a 2029 release is possible.

Related: One-third of central banks cool down on regulatory issues launching CBDC

“The actual development of the component (or part thereof) will be decided at a later stage, but the ECB governing board’s decision on the next stage of the project,” the ECB said. “The framework agreement does not involve any payments at this stage, including safeguards, allowing adjustments to the scope based on changes in legislation.”

Other components and services that technology companies will provide include “alias lookup”, allowing digital euro users to “not necessarily know the details of other end users’ payment service providers”. Giesecke+Devrient is also responsible for engineering and development that allows users to pay in digital euros or receive payments when offline.

EU authorities expressed concern about stability risks

In a potential digital euro rollout, officials from the ECB and EU financial regulators have been warning of risks in local markets introduced by certain stablecoins. These policies are in stark contrast to those of the United States, where many U.S. Congressmen and President Donald Trump signed a bill in July to establish a regulatory framework for coins.