The European Central Bank (ECB) has said that the digital euro can only work if the intermediation of banks provides effective online verification of transactions.
The Central Bank plans to introduce this requirement into the set of rules for private sector intermediaries distributing central bank digital currency (CBDC) in 2023. The ECB said it would consider verifying transactions offline, but “the time to develop this solution is more uncertain than for banks.” According to the regulator, this is due to ambiguity regarding the technology and security of the state cryptocurrency:
“The development of a third-party verified online payment solution cannot be delayed in case the timely release of a verified peer-to-peer offline payment solution proves impossible.”
Peer-to-peer online transaction verifications have been dismissed by the central bank as a “more experimental alternative” that will not be subject to further study. Fabio Panetta, a member of the ECB’s executive board, said that “it is essential that the Eurosystem retains full control over the issuance and settlement of the digital euro.” He added that officials are studying rules that will determine how the private sector can participate in the spread of the digital euro.
“We will soon begin work on a set of rules for the digital euro, which will indicate which organizations can participate in its distribution and how they will work,” Panetta said.
Earlier, ECB President Christine Lagarde said that work with CBDC continues, but initially the circle of users of international payments will be limited to central banks and counterparties from different countries.
Source: Bits
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