The European Central Bank has chosen Amazon among a small number of corporations to assist in the development of its CBDC prototype named the “Digital Euro.” On 16th September 2022, the European Central Bank (ECB) announced the five companies chosen to assist in the development of user interfaces for the digital euro, including Amazon, Italian bank Nexi and Spanish bank CaixaBank.
According to the ECB, the companies will work separately in different areas of the CBDC development project, testing the integration of the digital euro in seperate use cases. Each company will be focusing on an individual use case. Amazon will be in charge of testing e-commerce payment systems, CaixaBank and Worldline will be in charge of P2P payments prototypes while EPI and Nexi focus on retail point-of-sale payments.
Although these companies are working on different use cases for the Digital Euro, the European Central Bank is primarily responsible for the development of the CBDC’s code and infrastructure. The prototypes created by the companies will only test the functionality of the digital euro, but they will not be used in the project’s later phases according to the ECB.
According to “El Economista,” the ECB fears that the digital euro may cause a deposit leakage in commercial banks, which is why they are working with different payment providers to analyze the risks associated with the launch of the CBDC for the financial sector. The ECB’s concerns stemmed from the economic crash of Spain’s Banco Popular in 2017. During the crash, several companies and withdrew their funds in less than two months, causing more than 300,000 minor shareholders to lose all their money.
ECB officials recently said during an event organized by the European Economic and Social Committee that the digital euro is aimed at retail trade. This means its use will be limited to specific individuals, preventing companies from using it to settle payments or to carry out transactions on decentralized entities. The ECB also said its CBDC project is in the final stages and should be ready by the first quarter of 2023.
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