14 Dec 2020 · 2 min read

ECB: Private Sector Can Help with ‘Intensifying’ Digital Euro Project

The European Central Bank (ECB) has once again opened the door to some form of private-sector collaboration as it “intensifies” its work on the digital euro – a central bank digital currency (CBDC) for Eurozone nations.

Source: Adobe/peterschreiber.media

Per an official release, the ECB, the bank’s Governing Council has declared that it and fellow Eurosystem (central bank of euro-adopted nations) members have been “intensifying its work on the potential issuance of a digital euro.”

And the ECB added,

“This does not, however, imply any intention to crowd out the private sector’s role in providing payment services. Moreover, supervised private intermediaries would be best placed to provide front-end solutions and ancillary services and to build new business models based on a digital euro, should such a construct be introduced.”

The move comes just weeks after ECB president Christine Lagarde declared that a “properly designed digital euro would create synergies with the payments industry,” adding that to do so would “enable the private sector to build new businesses based on digital euro-related services.”

This apparent doubling down on messaging seemingly indicates that rather than go it alone with its CBDC issuance plans, EU financial leaders may even be hoping that private sector players will take the hint – and make their own interest known.

A number of private-sector players have already played key roles in CBDC issuance plans – including Sweden, which is working with Accenture on its e-krona project, and Cambodia, which has already launched a CBDC in conjunction with a Japanese blockchain provider that says it is also in conversation with other nations.

The ECB appears to be aware that the conventional banking system is lagging far behind payment systems such as crypto, with a renewed call in the same release for cross-border payments progress that will be carried out “in parallel” to the work on the digital euro.

The ECB said the Eurosystem was targeting “the full deployment of instant payments, to be offered to all citizens and businesses in Europe under attractive conditions,” adding that “improving cross-border payments beyond the euro area and the EU” was another priority.

And the bank added,

“The Eurosystem will extend its active support for innovation, digitalization and the establishment of an innovative European ecosystem for payments, including support for European fintechs.”

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