The European Central Bank (ECB), as part of its preparation phase for a potential digital euro launch, announced framework agreements with technology providers responsible for components of the central bank digital currency (CBDC).
In a Thursday notice, the ECB said it had reached agreements with seven entities — and at least one more expected to be announced — to provide services related to managing fraud and risk, a secure exchange of payment information, and software development for a possible digital euro. Among the companies were Feedzai, which uses AI to detect fraud and the security technology company Giesecke+Devrient.
“Following the framework agreement conclusion, G+D and other successful tenderers will work with the ECB to finalize planning and timelines,” said Dr. Ralf Wintergerst, CEO of Giesecke+Devrient. “Under the guidance of the ECB Governing Council and in line with EU legislation, this work will cover the design, integration, and development of the Digital Euro Service Platform.”
Agreements with technology companies for risk and fraud management of the potential digital euro. Source: ECB
ECB officials have been exploring a potential digital euro rollout since 2021, moving into the preparation phase in late 2023 as part of its plans. Though the Thursday notice clarified that the central bank authorities would only decide whether to launch the CBDC “once the Digital Euro Regulation has been adopted,” an ECB official said last week that a launch in 2029 was possible.
Related: A third of central banks cool on launching CBDCs over regulatory concerns
“The actual development of the components — or parts thereof — will be decided at a later stage, subject to the ECB Governing Council’s decision on the potential next phase of the project,” said the ECB. “Framework agreements do not involve any payment at this stage and include safeguards allowing for the scope to be adjusted in line with changes to the legislation.”
Other components and services that the technology companies will provide include “alias lookup,” allowing digital euro users to send or receive funds “without necessarily knowing the details of the Payment Service Provider of the other end-user.” Giesecke+Devrient is also responsible for the engineering and development of allowing users to make or receive payments with digital euros while offline.
EU authorities express concerns about stablecoin risks
Amid the potential digital euro rollout, officials with the ECB and European Union financial watchdogs have been warning about possible risks on local markets introduced by certain stablecoins. These policies stand in contrast to those of the US, where many members of Congress and President Donald Trump signed a stablecoin bill into law in July, establishing a regulatory framework for the coins.
ECB President Christine Lagarde said in September that EU lawmakers should take steps to address potential risks from stablecoins jointly issued by entities covered under the region’s Markets in Crypto-Assets framework (MiCA) and non-EU companies.
The European Systemic Risk Board, in a separate decision, reportedly passed a non-legally binding recommendation to ban similar jointly issued stablecoins.
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