One of cryptocurrency’s most notable use cases is enabling instant cross-border payments. That’s why the Central Bank Digital Currency (CBDC) program has attracted hundreds of jurisdictions worldwide, and some countries like China have already linked the technology with their central bank.
Similarly, Europe Central Bank (ECB) is currently in the investigation phase of CBDC and has chosen five companies to build prototypes for the testing. It includes e-commerce giant Amazon, Italian-based prominent banking center Nexi, and Spanish multinational financial service CaixaBank. And remaining two include European Payment Institution (EPI) and the French payment channel Worldline. The ECB tapped these five tech companies amongst 50 other front-end developers that responded to the ECB’s call of April.
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Each firm will build different prototypes for the use cases of the digital euro. Notably, no firms would utilize the developed interfaces after testing, and companies willing to integrate would develop newly, ECB said.
ECB Is Currently In The Two-Year Investigation Phase
Although ECB joins the list of advanced countries benefiting from the technology, it may take nearly half of a decade to enroll its digital euro in the market. It is currently passing from the investigation phase and has not formally decided whether to launch a digital bank currency. The investigation phase is due in October 2023, and the officials expect to end it in the year’s first quarter.
A tech institution located in European’s financial hub Frankfurt expressed his opinion about the proposed prototypes adding,
The aim of this prototyping exercise is to test how well the technology behind a digital euro integrates with prototypes developed by companies.
Each Company To Develop Apps For Different Use Cases
The payment medium Worldline will work to prepare infrastructure for transferring digital euros between individuals. Likewise, CiaxaBank will build a mobile app to test digital euro transfers to banks and other public payment channels.
Similarly, the Nexi group expressed a deep interest in the project that will develop prototyping for digital payment transfers at the retail level. European Payment Institute will also follow similar developments. Chief Strategy Officer at Nexi, Roberto Catanzaro, added in a statement;
We look forward to bringing the best of Nexi’s recognised know-how in the digital payments space and more specifically in Merchant solutions, to drive innovation in the European payment landscape.
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Expressing his intentions regarding CBDC, Amazon’s vice president noted in an email;
The future will be built on new technologies that enable modern, fast, and inexpensive payments.
The world’s reaction to consider the potential of central bank digital currencies and developments in some regimes has attracted ECB officials to explore if or when the central bank can unveil its digital form of the euro. In September 2021, the central bank of Europe constituted a series of groups to examine digital payments. The groups concluded that using digital currency in online marketing and traditional stores would be a key feature of the euro.
Featured image from Pixabay and chart from TradingView.com