ECB Finalizes Digital Euro Prototype as Development Decision Looms
ECB Finalizes Digital Euro Prototype as Development Decision Looms
The European Central Bank has concluded its model for a digital euro in preparation for whether to produce the EU's fiat currency in a new structure.
The ECB states that its central bank digital currency (CBDC) can be utilized to improve innovation. However, using Web3-style distributed ledger technology and smart contracts seems more prompt.
ECB Executive Officer Fabio Panetta told European Parliament's Irene Tinagli in a letter that the move is possible to modify the digital euro design choices into current payment landscapes while allowing its extensive range for better features and innovations.
Although the digital euro was once launched in response to Facebook's now discontinued Libra currency, the ECB's model has been bombarded by issues arising from its participation with U.S. tech firm Amazon.
While EU lawmakers suggest revisions to the plans, Panetta was eager to minimize Amazon's role, claiming the prototypes were a "lab experiment" that would be "discarded and not used further."
ECB rejected distributed ledger technology but highly favored a centralized prototype focused on unspent transaction results in terms of planning and design, the UTXO system.
The system provides fast and effective transaction validation and can support various payment types while protecting customer privacy, as stated by ECB reports.
With that said, the prototyping exercise for ECB directs the committee to exert effort for potential challenges in the system to ensure the project's resilience, latency, and availability.
