With ECB nearing its launch, could Digital Euro become a reality?

By Puja Sharma

Euro central bank digital currency prototyping results have been published by the European Central Bank (ECB). During the exercise, simulated digital euro payments were tested offline along with four other examples of interoperability.

The project was part of the Eurosystem’s second phase of preparations for a potential digital euro pilot launch in the fall of this year. The exercise ran from July 2022 to February 2023.

Nexi is part of the project having been chosen to develop a prototype for digital payments at physical shops

The European Central Bank has published the summary and the lessons learned from the prototyping exercise it has conducted from July 2022 to February 2023 to test how design choices for the digital euro could be technically implemented and integrated into the existing European payments landscape.

The tests showed that it is possible to smoothly integrate them, while leaving ample scope for innovative features and technologies. The findings also confirmed that a digital euro would work both online and offline, using independent designs, thus increasing the resilience of the digital euro.

The prototyping exercise is an important part of the investigation phase of the digital euro project. This project was launched by the ECB and the euro area national central banks to ensure that central bank money remains accessible in the digital age. The investigation phase commenced in October 2021 and will be concluded in autumn 2023. It aims to address key issues relating to the design and distribution of a digital euro.

The digital euro project was launched in October 2021, and the Governing Council of the ECB will decide in autumn 2023 whether to proceed with a preparation phase to develop and test the digital euro. If the Governing Council opts to go ahead with a preparation phase, this does not necessarily mean that it will issue a digital euro. The Governing Council will take a dedicated decision on whether to issue a digital euro at a later stage.

Nexi was selected in 2022 as one of the five companies to provide front-end prototypes to test different payment use cases. In particular, Nexi was chosen for the point-of-sale payments initiated by the payee use case.

“We are honoured to have been chosen to support the European Central Bank during the investigation phase of the digital euro”, said Roberto Catanzaro, Chief Business Officer Merchant Solutions of Nexi Group and member of the Digital Euro Market Advisory Group. “An engaging user and merchant experience is paramount to ensure wide adoption of the digital euro and we have brought our best expertise in both acceptance and mobile payments technologies to set a clear way forward.”

Key Highlights:

• The European Central Bank has published the summary and the lessons learned from the prototyping exercise it has conducted from July 2022 to February 2023
• Nexi as a part of the project, has been chosen to develop a use case for digital payments at physical shops.
• Tests showed that it is possible to smoothly integrate CBDCs into the existing European payments landscape, while leaving ample scope for innovative features and technologies.
• A digital euro would work both online and offline, using independent designs, increasing the resilience of the digital euro.