At a hearing before the European Parliament's Committee on Economic and Monetary Affairs, the deputy governor of the Bank of Italy, Piero Cipollone, announced that only companies based in the European Union, which are controlled by European citizens, will be able to participate in the development of the digital euro.
The European Central Bank is excluding foreign companies, such as Amazon, from the development of its CBDC digital currency. The central bank is reportedly taking a new approach, moving away from collaboration with U.S. companies and foreign players, in order to ensure that the digital currency can better adapt to the needs of the eurozone and also to free users from international payment processors, Cipollone said.
So, although Amazon was one of the privileged international companies that participated in the tests of the digital euro last year, it now seems to have been excluded from contributing to this development.
El work Amazon’s role in designing the digital euro involved prototyping back-end infrastructure that would facilitate the seamless integration of the CBDC currency into the Eurosystem and existing European payments processes.
ECB prioritizes data privacy
During the hearing, Cipollone also highlighted that the European Central Bank is working on the development of the digital euro, taking user data privacy as a priority.
As more countries explore the development of central bank digital currencies, known as CBDCs, data privacy is becoming more mainstream as a crucial component to ensuring the security of future users of these digital currencies.
According to the deputy governor of the Bank of Italy and a member of the ECB's governing board, the central bank is focusing on designing the digital euro in such a way that users can use the digital currency as safely and discreetly as cash.
While the digital euro is being developed as a complement to fiat money, the introduction of a CBDC into the eurozone financial system could provide greater fluidity in payments and transactions and offer greater universality for the official currency of the 27 member states that make up the European Union.
A significant step in payments innovation
The development of the digital euro, as explained by the ECB, beyond creating a new form of money, seeks to strengthen the economy of the European Union as a whole, increasing the autonomy of the region and strengthening its competitiveness and sovereignty.
A CBDC digital currency adapts to the changing needs of users in the digital age, where highly efficient and secure electronic means of payment are required. According to the central bank, the creation of a digital euro will address all these needs, while offering “a basis for further innovation by private payment service providers” and improving the European payments landscape, making it more competitive and resilient against other international payment service providers.
The risks of using CBDCs persist
Despite the new approach being taken by the ECB regarding the privacy and stability of the digital euro, concerns about the risks involved in using these digital currencies persist, with several experts highlighting the cybersecurity and financial privacy challenges that CBDCs encompass.
Currently, more than 130 central banks, representing the 98% of the world economy, are working on the development of a CBDC in different phases, with the aim of moving towards the era of digitalisation of payments and money. The ECB is in a preparation phase regarding the euro CBDC, which will be completed in 2025.
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