ECB adviser defends Amazon’s role in Digital Euro Project
Jürgen Schaaf, adviser to the Senior Management of Market Infrastructure and Payments at the European Central Bank (ECB), on Wednesday defended the EU’s decision to make Amazon one of the five firms to test a digital euro.
“The front-end prototyping experiments are driven by technological considerations. The companies that have been selected for the five were the most appropriate in terms of the needs we have for technological tests and experiments,” Schaaf said in a panel discussion hosted by the Association for Financial Markets in Europe .
Earlier this month, the European Central Bank selected five companies to help develop user interfaces for a potential digital euro.
The companies include US e-commerce company Amazon, Spanish multinational CaixaBank, French payments platform Worldline, Italian payments-focused bank Nexi and EPI (European Payments Initiative), a consortium of Eurozone banks. The five firms were selected from a group of 54 potential companies that responded to an ECB call for participants.
Each of the five companies is tasked with focusing on one area of use for the digital euro. Amazon is expected to test the use of e-commerce payments. CaixaBank has been commissioned to develop a mobile app that simulates the steps users will take to transfer digital euros to their bank accounts. Worldline will explore offline payments between individuals. And finally, EPI and Nexi will work with retail payments at the point of sale.
The ECB said the purpose of the prototyping exercise is “to test how well the technology behind a digital euro integrates with prototypes developed by companies.” The bank aims to simulate transactions in a real environment, and all transactions will be processed using the Eurosystem interface for a realistic experience.
While Amazon’s task involves developing payment prototypes for e-commerce, Schaaf told the panel that the results of this work will not automatically enter the follow-on experimental phase. This suggests that Amazon may not continue to have favored access, according to the report.
However, Schaaf admitted that he did not want to see a “political” exclusion of US companies in the digital dollar project. US retail giant Amazon was one of five companies chosen by the ECB to develop a user interface for a potential digital dollar earlier this month.
“Our desire to strengthen our monetary autonomy with a digital euro does not mean that Europe will close all its gates to traders from abroad,” said Schaaf. “There is no protectionist intention behind it.”
The digital euro project is moving forward
In April, the ECB invited fintech firms to apply for the prototyping exercise, and 54 firms expressed their interest. Last week, the ECB narrowed the list to five companies based on the specific characteristics of the selected areas in the prototyping exercise.
The development shows that the digital euro is making significant progress even if the ECB adopts a cautious process. The simulation exercise is part of the investigation stage to determine the viability of a regional CBDC which started in October 2021 and will end in October 2023.
At the end of the two-year exercise, the ECB will decide whether or not to start developing a digital euro. The survey involves the central banks of all participating nations and interested private companies who share opinions on the proposed direction of the process.
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