The eurozone’s monetary authority, the Eurosystem, is looking for financial companies willing to develop front-end solutions for the digital euro. There are plans to conduct a “prototyping exercise” this year to test transactions using the backend developed by the regulator.

Eurosystem selects front-end provider for digital euro project

As part of the ongoing investigation into the potential issuance of a euro digital currency, the Eurosystem intends to conduct an experiment that will include end-to-end transactions involving the Central Bank Digital Currency (CBDC), the European Central Bank (ECB) ahead of the weekend announced.

The agency, which consists of the ECB and the central banks of the eurozone members, is looking for interested parties who would like to offer front-end prototypes for the trials. Transactions start from their front-end prototype and are processed through the back-end interface, both developed by the Eurosystem.

Payment service providers, banks and other relevant companies were invited to participate as front-end providers of technical solutions to facilitate digital euro payments. Application deadline is May 20th. The prototyping exercise is scheduled to begin in August and potentially continue through the first quarter of 2023.

According to the detailed announcement, the aim is to put together a pool of front-end providers with whom the Eurosystem will work together in the development of user-oriented prototypes. The authority will invite potential participants to explain the use cases for their prototypes. A limited number of providers, up to five according to the Eurosystem, are then selected.

They will sign contracts with the Eurozone financial authorities and organize prototype development. Throughout the process, providers can provide their feedback on the Eurosystem interface and back-end infrastructure, including by submitting specific data requirements to support a particular business model.

The project to introduce a digital version of the common European currency entered the investigation phase in October last year. In February it was revealed that the European Commission plans to present a bill establishing the legal basis for the currency early next year. Fabio Panetta, a member of the Executive Board of the ECB, recently stated that the bank is focusing its efforts on the digital euro.

tags in this story

Backend, banking, CBDC, central bank, currency, digital currency, digital euro, ECB, euro, eurosystem, exercise, experiment, frontend, monetary authority, payment provider, prototype, regulator, solutions, tests, trials

Do you expect other initiatives to test the digital euro platform in the near future? Tell us in the comment section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchen’s quote: “Being a writer is what I am, not what I do.” Along with crypto, blockchain and fintech, international politics and business are two other sources of inspiration.

photo credit: Shutterstock, Pixabay, WikiCommons

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