Nikolas Sargeant
The European Central Bank has taken a significant step toward a potential digital euro by announcing framework agreements with seven technology companies to develop critical infrastructure for the central bank digital currency. The partnerships include fraud detection specialist Feedzai and security technology firm Giesecke+Devrient, which will provide services ranging from AI-powered fraud prevention to secure payment information exchange and software development.
The agreements come as part of the ECB's preparation phase that began in late 2023, following years of exploration since 2021. However, the central bank emphasized that no final decision has been made about launching the digital euro, pending adoption of the Digital Euro Regulation by EU authorities. An ECB official recently suggested that a launch in mid-2029 remains a realistic possibility.
The technology providers will develop various components including an "alias lookup" feature that allows users to send and receive funds without sharing payment service provider details. Giesecke+Devrient will also engineer offline payment capabilities, enabling digital euro transactions without internet connectivity. The ECB stressed that the framework agreements involve no immediate payments and include provisions to adjust the scope based on legislative changes.
European Officials Warn of US Stablecoin Competition
The digital euro push comes amid growing concerns about American crypto influence threatening Europe's monetary sovereignty. Pierre Gramegna, managing director of the European Stability Mechanism, has called for expedited development of the digital euro in response to the United States' favorable stance toward dollar-denominated stablecoins. Gramegna warned that US-backed stablecoins could create global payment systems that undermine Europe's financial autonomy and destabilize the eurozone. With American tech giants exploring large-scale payment solutions based on dollar-backed stablecoins, European officials view the digital euro as essential to maintaining the euro's central role and preventing over-reliance on private or foreign payment systems.
The digital euro preparations unfold as EU officials express concerns about stablecoin risks in local markets, contrasting sharply with the United States where Congress and President Trump established a regulatory framework for stablecoins in July. ECB President Christine Lagarde has called for measures to address potential risks from stablecoins issued jointly by EU and non-EU entities.
