The European Central Bank selects five companies to test use cases for the digital euro

The European Central Bank selects five companies to test use cases for the digital euro

The European Central Bank selected Amazon and other small companies from among 54 candidates to help develop its CBDC prototype, the “Digital Euro.”

On September 16, the European Central Bank (ECB) announced the five companies chosen to assist in the development of user interfaces for the digital euro, including e-commerce giant Amazon, Italian bank Nexi and Spanish bank CaixaBank.

The ECB and third-party companies work together in the digital euro

According to the ECB, the companies will work in separate areas of the CBDC development project, testing the integration of the digital euro in different use cases.

Each company will focus on an individual use case. Amazon will be responsible for testing e-commerce payment systems; CaixaBank and Worldline will be in charge of prototyping P2P payments, while EPI and Nexi will work on retail payments.

Although these private companies are working on different use cases and integrations for the digital euro, the European Central Bank is the only one responsible for the development of the CBDC’s code and infrastructure.

Prototypes will serve for testing purposes only

The prototypes created by the companies will only serve to test the functionality of the digital euro, but according to the ECB, they will not be used in the project’s later phases.

The ECB said the CBDC project is in its final stages and will be ready by the first quarter of 2023, fulfilling its previous announcements.

Roberto Catanzaro, Chief Strategy & Transformation Officer at Nexi Group and member of the Digital Euro Market Advisory Group, said in a company statement that Nexi Group is proud that its payment platform contributes to the development of the digital euro.

The ECB assesses the risks of launching the digital euro

According to local Spanish news outlet “El Economista”, the ECB fears that the launch of the digital euro could cause a “deposit leak in commercial banks”, which is why it is working with several leading payment providers to analyze the risks and opportunities. related to the launch of CBDC for both people and businesses.

It is worth mentioning that the concerns of the ECB come together with the deep financial crash that Spain’s Banco Popular suffered in 2017. During this event, several companies and public entities withdrew their money in less than two months, which led to more than 300 000 minor shareholders lose all their money.

In addition, ECB officials recently said at an event organized by the European Economic and Social Committee that the digital euro will be aimed at retail, so its use will be limited to specific types of individuals, preventing companies from using it to settling invoices or carrying out transactions on decentralized platforms.

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