The ECB will reuse existing open standards (CPACE, nexo and Berlin Group) to reduce costs.
Implementation is subject to the approval of the regulatory framework by legislators.
In a decisive step towards the modernization of its financial system, the European Central Bank (ECB) announced the signing of agreements with three European standardization organizations: the European Card Payment Cooperation (ECPC), nexo standards and the Berlin Group.
This collaboration seeks to establish the technical foundations that will allow the digital euro to operate fluidly, securely and economically throughout the territory of the Union. In simple words, it is bring the digital euro to all points of sale in the eurozone.
The central objective is to avoid fragmentation and current dependence on non-EU payment infrastructures or those outside Europe. By adopting open standards already known to the industry, the Eurosystem aims to ensure that the digital euro is not an operational burden for businesses, but rather an integration tool.
The use of CPACE technology, for example, will enable contactless payments (tap-to-pay) are compatible with current terminals, facilitating an almost invisible transition for the end consumer, reported the bank through a press release.
Piero Cipollone, member of the Executive Commission of the ECB, highlighted that this move provides payment service providers and retailers with the “necessary certainty to invest and innovate.”
According to the organization, the use of open standards is the European response to the Proprietary systems controlled by international card giants and global digital wallets, as reported by CriptoNoticias.
However, technical infrastructure is only part of the equation. The ECB has stressed that the full operationalization and large-scale deployment of the digital euro depends critically on the adoption of the corresponding regulation by European co-legislators.
This legal framework will not only grant the digital euro the status of legal tender, but will also will define privacy limits and compensation model for participating financial entities.
At this point it is important to comment that, for European citizens, the digital euro represents both an opportunity and an open debate on privacy. According to recent reports, the debate over “programmability”, anonymity and freedom remains a sticking point.
While the ECB assures that the digital euro will offer levels of privacy similar to cash for transactions offlinevarious analyzes in the cryptocurrency sector suggest that the implementation of a Central Bank Digital Currency (CBDC) could facilitate stricter state control over consumption habits.
The integration of these new technical standards, therefore, is not only a logistical advance, but also the preparation of the infrastructure on which it will take place the next great battle for financial freedom in the digital age.