Eurozone’s monetary authority, the Eurosystem, is looking to enlist financial companies willing to develop front-end solutions for the digital euro. The plan is to carry out a “prototyping exercise” this year to test transactions to the back-end developed by the regulator.
Eurosystem selects front-end providers for the Digital Euro Project
The Eurosystem will conduct an experiment as part of its ongoing investigations into possible issuances of a digital euro money. This includes testing end-to-end transactions using the CBDC, which the European Central Bank (ECB), announced prior to the weekend.
This authority is made up of the ECB, the central banks of eurozone member countries, and other interested parties. Transactions will take place at the front-end prototype, and then they will move through the interface to the back end. Both were developed by Eurosystem.
As front-end providers for technical solutions that facilitate digital euro payment, financial institutions, as well as other related companies, have been invited. They have until May 20 to submit their application. Prototyping will begin in August, and could continue through the first quarter 2023.
According to the announcement, it is intended that a group of front-end developers will be assembled with the Eurosystem in order to develop user-facing prototypes. Potential participants will be invited to present the uses of their prototypes by the authority. The Eurosystem stated that a limited number of participants, not more than five, would be chosen.
The providers will sign agreements with the Eurozone financial authorities and organize prototype development. The providers can share feedback about the Eurosystem interface, back-end infrastructure and specific business models.
In October last year, the investigation into the project to create a digital currency for Europe began. It was reported in February that the European Commission plans to introduce a bill setting the legal framework for the currency as soon as possible. Fabio Panetta (a member of ECB’s Executive Board) recently indicated that the bank has shifted its attention to the digital currency.
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