The ECB is continuing its digital euro investigation with more pieces of the potential system filled in, but no commitment to blockchain technology or even its issuance has been made.
Progress continues on the creation of a digital euro, and therefore the European central bank (ECB) has documented it in a very second progress report that describes design and distribution choices recently approved by its governing council.
The report considers four crucial issues, roughly to keep with the timeline the ECB set for itself that tentatively culminates in a very decision on whether or not to transition from the investigation to the realization phase of work in Q3 2023. The report outlines the roles of the Eurosystem and intermediaries and establishes that supervised intermediaries would be responsible for all management and user-facing roles in the system. The central banks that frame the Eurosystem would verify and record transactions, correct errors in this process and bear responsibility for their accuracy. nonetheless, “the digital euro would be designed so it minimised Eurosystem involvement within the process of user knowledge,” the report states.
Offline peer-to-peer transactions with validated digital euros may be settled in a very digital storage device and later “verified and recorded through secure elements in hardware devices.”
The ECB isn't committed to blockchain technology, the report notes:
“The Eurosystem could rely on either traditional technology, distributed ledger technology or a combination of both for settlement activities. The Eurosystem has not yet taken a decision on the technology that would be best suited for a digital euro.”
Funding and defunding (converting money to and from digital form) ought to include mechanisms to handle transactions that exceed limits set on digital currency accounts with automatic access to holders’ bank accounts.
Related: European Central Bank chooses Amazon and 4 other firms to prototype digital euro app
A set of pan-euro rules, standards and procedures forming a “scheme” would be necessary for the just distribution of the digital euro, the report states. The goal of the scheme are going to be that:
“Paying in digital euro should always be an option, irrespective of the entity with which end users open digital euro accounts or wallets and of their country of origin.”
The ECB published its first digital euro progress report in September, once a year of work.
(DEREK ANDERSEN, Cointelegraph, 2022)