IBM advises on successful implementation of digital euro

Author: Derek Andersen, Cointelegraph; Compiler: Songxue, Golden Finance

In a recent blog post, IBM shared some ideas on how to make the digital euro a success. It makes five recommendations for designers to help the European Central Bank (ECB) digital currency “enter the euro area’s highly competitive, multifaceted and heterogeneous payments landscape.”

Some of IBM’s views have been found in legislative proposals from the European Commission (EC). The first point “builds on the existing track” is already foreseen in the EU plan, although it could be extended. Simplicity, they believe, will be key to initial adoption, and familiarity reinforces this.

Intermediaries will also play a role in digital euro acceptance, and the digital currency should be designed to meet their needs:

“We believe that a more refined intermediary ecosystem is needed. The future intermediary landscape of the digital euro should be multi-layered. Planning multiple intermediaries between retail users and the ECB’s digital euro components will better support smaller intermediaries mechanism."

Standardization of APIs will simplify integration and encourage competition, the post said.

Possible intermediary plans for a digital euro. Source: Digital Perspective

IBM said the EC proposal includes strong offline privacy guarantees that can be extended to online activities to ensure end-to-end transaction privacy. The proposed legislation provides privacy measures that are “consistent with current levels of privacy for digital payments.” IBM said the privacy rules would need to be harmonized with multiple existing regulations, including reporting thresholds, to ensure reporting is isolated.

The authors note: **Distributed ledger technology is not essential to the creation of a digital euro, but blockchain technology offers the greatest benefits. ** They add that its operation does not need to be more carbon intensive than non-blockchain systems.

In the end, IBM suggests, go slowly but surely. Start with a minimum viable product to accelerate time-to-market and use the sandbox to deal with the enormous complexity of the operating environment of the future digital euro