19.09.202213:29 Forex Analysis & Reviews: Digital EURO

The European Central Bank (ECB) has announced it has selected five new partners to help develop a digital euro prototype, with tech giant Amazon shortlisted.

There were 54 candidates in total who were eager to help the ECB in its efforts, and the bank settled on Amazon, the European Payments Initiative (EPI), the Spanish multinational CaixaBank, the French payments platform Worldline and the Italian payments-focused bank Nexi.

The ECB settled on these options because they best suited the specific opportunities needed to be used. Each of the selected companies will be responsible for different roles in prototyping.

Amazon was tasked with developing e-commerce payments as part of the project. CaixaBank will be responsible for developing peer-to-peer online payments for the mobile app, while Worldline will be responsible for the offline version. EPI will manage payments at the point of sale from the payer, while Nexi will process them for the recipient.

It is planned that new prototyping will begin in September and be completed by the end of December.

The move comes amid a two-year ECB investigation into whether it should issue a digital euro as an alternative to central bank-issued cash. The current phase of research and prototype evaluation is expected to be completed by March 2023.

The main purpose of creating a digital euro is to facilitate personal payments in the European Union. A formal decision on whether the ECB will issue it should be made in September 2023.

More than 100 jurisdictions are actively exploring the launch of a central bank digital currency, with countries like China leading the way, while the US has yet to decide if a digital dollar is in the country's interests.

However, this is likely to change as Friday's release to regulate cryptocurrencies in the US by the White House contained a section that specifically outlined the goals for the US CBDC system, which reflect the federal government's priorities.