The European Central Bank (ECB) has recommended that private sector players should involve in handling customer onboarding, creation of wallets and managing daily transactions in case a digital euro system comes into place.
The recommendation was given as part of a new report released by ECB on its retail central bank digital currency (CBDC) project.
The new report, which is the second such document published after an initial progress report in September this year, provides updates on ECB’s progress on the investigation stage of the CBDC project that commenced in October last year.
It includes information on the design and distribution choices for a digital euro as well as the role of intermediaries.
In the report, ECB said: “The Eurosystem has always made it clear that the digital euro should be available through supervised intermediaries.
“In the light of this, this report outlines the respective roles of the Eurosystem and of intermediaries, such as credit institutions and payment service providers, in the digital euro ecosystem.
“Holding a digital euro would amount to a direct claim against the central bank – as is the case with banknotes today.”
ECB further stated that initiation, authentication, validation along with post-settlement works, such as reconciliation, will be supervised by intermediaries, while the Eurosystem will carry out the settlement of transactions.
However, the Eurosystem will not have any data on the number of digital euro held by an individual end user or the payment pattern of the users.
The report comes shortly after ECB revealed that it had selected five companies to develop the potential user interfaces for the digital euro project.