The European Central Bank (ECB) today published two reports on its market research and prototyping, which were conducted as part of the research phase of the digital euro project.
The Eurosystem invited market participants to take part in market research to gain industry knowledge and experience in building potential technical solutions for the digital euro. The research indicates that there are a sufficient number of European suppliers capable of developing solutions related to the digital euro. They also suggest that there are many different design and technological options that can be used to create a technical solution for the digital euro.
From July 2022 to February 2023, the ECB conducted prototyping to see how digital euro payments could look in different use cases. This exercise involved integrating five user interfaces developed by different suppliers for each use case (front-end prototypes) and a settlement system designed and developed by the Eurosystem (back-end prototype). Various design options were tested to see if they could be technically implemented and integrated with the Eurosystem’s settlement system. The tests showed that digital euro can be seamlessly integrated with the existing payments landscape while leaving room for innovative features and technologies in the distribution of the digital euro. The results also confirm that the digital euro could essentially work both online and offline using different technical designs. However, the question remains whether an offline solution that meets the Eurosystem’s requirements and achieves the necessary scale can be delivered in the short and medium term using existing technology.
Both the back-end prototype and front-end prototypes were developed for research purposes only and will not be further used. Neither the Eurosystem nor the front-end prototype participants processed any personal data during the exercise.
The digital euro project was launched in October 2021, and the ECB’s Governing Council will decide in autumn 2023 whether to enter the preparatory phase for the development and testing of the digital euro. If the Governing Council decides to enter the preparatory phase, it does not necessarily mean the issuance of the digital euro. The decision on the issuance of the digital euro will be made at a later date.
The results of these reports will serve as the basis for both the conclusions from the research phase and any future steps. The Eurosystem continues to collaborate with stakeholders and market participants to ensure that the digital euro meets the needs of users.