Peer-to-Peer Validation for Digital Euro Might Not Be Feasible, ECB Says

The central bank will soon start developing a rulebook for its CBDC initiative.

AccessTimeIconSep 29, 2022 at 8:00 a.m. UTC
Updated May 11, 2023 at 5:09 p.m. UTC

The digital euro might only work online using third parties such as banks to validate transactions, the European Central Bank has said, as it plans a rulebook under which private sector intermediaries can distribute the central bank digital currency.

A document published on Thursday puts peer-to-peer validation options on the back burner as the ECB’s governing council prepares for a decision on whether to issue a digital version of the euro, due in September 2023.

The ECB will examine using individual users to validate transactions offline, but “the time to market for this solution is more uncertain” than one involving traditional intermediaries like banks, given uncertainties over technology and security, the document said. “The development of a third-party validated solution for online payments should not be delayed in case the timely delivery of a peer-to-peer validated solution for offline payments proves to be unfeasible.”

A third option, using peer-to-peer validation online, was dismissed by the central bank as a “more experimental alternative” that won’t be further investigated for the time being.

Fabio Panetta, an ECB executive board member, told lawmakers it is of “utmost importance that the [e]urosystem retains full control over digital euro issuance and settlement,” but added that officials are also looking at the regulations that would set out how the private sector could be involved in distributing the digital euro.

“We will soon start work on a rulebook for the digital euro scheme,” setting out which entities can participate and how they would operate, Panetta said. A single brand would ensure users have the same experience when using the system anywhere in the euro area.


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Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

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