The European Central Bank selected Amazon and other smaller corporations from 54 applicants to help in the development of the prototype of its CBDC, the “Digital Euro”, as the partner for the development.
The European Central Bank (ECB), announced on September 16 the five companies that were selected to help in the development and maintenance of the user interfaces for digital euro. These included e-commerce giant Amazon, Italian banks Nexi, and Spanish banks CaixaBank.
Digital Euro: Third-Party Companies and the ECB Work Together
The ECB states that the companies will be working in their own areas in the CBDC development project. This will allow them to test the integration of digital euro in various use cases.
Each company will be focusing on a specific use case. Amazon will test e-commerce payment system prototypes; CaixaBank, Worldline and Worldline will prototyping P2P payments. Nexi and EPI will focus on retail point-of sale payments.
Hemos sido seleccionados por el @ecb como el unico banco europeo para desarrollar un proyecto de aplicacion movil para pagos #P2P (entre personas) con #EuroDigital.
— CaixaBank (@caixabank) September 16, 2022
These private companies may be working on different uses and integrations of the Digital Euro. However, the European Central Bank is responsible for the development and maintenance of the code and infrastructure for the CBDC.
Prototypes will be used for testing purposes only
These prototypes will be used to verify the functionality of digital euro. However, the ECB says they won’t be used in any phase later.
According to the ECB, its CBDC project is now in its final stages. It will be complete by the first quarter 2023, as per previous announcements.
Roberto Catanzaro is Chief Strategy & Transformation Officer at Nexi Group. He is also a member of the Digital Euro Market Advisory Group. In a company statement, Nexi Group stated that it is proud of its contributions to the development and growth of the digital euro.
We are proud to have been selected by the European Central Bank for a prototype solution to #digitaleuro payments. Read the full news at https://t.co/GVp4AMCWmR#ecb #innovation pic.twitter.com/NKqT6mSY8Q
— Nexi Group (@nexigroup), September 16, 2022
The Digital Euro Launch Risks: The ECB Evaluates
According to El Economista, the ECB is concerned about the possibility of a “deposit loss in commercial banks” due to the digital euro’s launch. This is why they have teamed up with leading payment companies to assess the risks and opportunities that will come with the CBDC launch for people and businesses.
It is important to mention that the ECB’s concerns are linked with the 2017 deep economic crash Spain’s Banco Popular experienced. This event saw many companies and public entities withdraw their funds in less that two months, leaving more than 300,000. Minor shareholders without any money.
Moreover, ECB officials stated recently at an event organized by European Economic and Social Committee, that the digital currency will be aimed specifically at retail trade. This means it will not be available to all companies to pay invoices or conduct transactions on decentralized platforms.
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