European Central Bank (ECB) chooses Amazon to prototype digital euro. What to expect?

The European Central Bank (ECB) has finally selected its partners to collaborate with for the development of a prototype for a digital euro, the project of which was announced back in June last year. The five leaders in the field of fintech, e-commerce and payments will develop the user interfaces for  the digital euro.

The aim of this prototyping exercise is to test how well the technology behind a digital euro integrates with prototypes developed by companies,

the Frankfurt-based institution explained.

Each of the five firms will focus on one specific use case:

 The five companies were chosen from a pool of 54 front-end providers who applied as early as April 2022, the European central bank detailed,  adding that they best matched the “specific capabilities” required for the assigned use case. 

A two-year plan dedicated to retail central bank digital currency (CBDC) was approved in June 2021. A digital euro may be part of legislation that is being planned for 2023, according to statements from the European Commission. The ECB is currently conducting internal trials and simulated transactions of the digital euro. Those transactions will be processed through the Eurosystem’s interface (Monetary Authority of the Eurozone).

ECB President Christine Lagarde said in February that a digital euro will not replace cash but will complement it.

The ECB has big potential to become one of the first central banks to issue a digital format for its currency in countries with a developed economy. You should know that Nigeria and other 7 countries of the Eastern Caribbean Union including Antigua and Barbuda have developed electronic versions of their national currencies.

The European Central Bank is not giving much information regarding the development of the digital euro project and that’s why it’s rather hard to understand the current state of development; so you have to rely on the current reports.