Dani M.’s Post

The European Central Bank (ECB) has issued its first progress report on the development of a central bank digital currency (CBDC), underscoring its commitment to a secure, private, and efficient digital payment system. Privacy and Security: The ECB aims to ensure high privacy standards using pseudonymization, hashing, and encryption to protect transaction anonymity both online and offline. Offline transactions will only be known to the payer and payee, mirroring the privacy of cash. Online transactions will use advanced technologies to prevent linking transactions to specific users, with personal data used only as legally required and commercial use needing explicit consent. Supervision and Compliance: The ECB will be supervised by independent data protection authorities to ensure adherence to EUDPR and GDPR. Offline Functionality: The ECB is developing offline capabilities for the digital euro, enabling payments without internet connections and exploring smart card technologies for direct transactions. Financial Stability: The ECB is setting holding limits and linking digital euro wallets to commercial bank accounts to ensure financial stability and effective monetary policy. Legislative Support and Engagement: The ECB will provide technical expertise for legislative discussions and remain engaged with stakeholders to support the digital euro project as a collective European effort. #DigitalEuro #ECB #CBDC #Privacy #Security #Fintech #DigitalPayments #EURegulation

On 24 June, the European Central Bank (ECB) released a progress report detailing the advancements in the preparation phase for a potential digital euro. This phase, which began on November 1, 2023, will run for two years, focusing on establishing a legal framework and defining all functional features before deciding on the issuance of a digital euro. Key Highlights: - Preparation Phase Progress: ECB executive board member Piero Cipollone announced that the preparation phase is “progressing well” and supports ongoing democratic debates on the legal framework. - Privacy and Offline Functionality: The report emphasizes the importance of privacy and offline functionality, ensuring high privacy standards for both online and offline transactions. Measures such as pseudonymisation, hashing, and data encryption will protect user data. - Bridge Devices for Offline Payments: The ECB is exploring technical tools and developing offline functionalities to enable transactions without an internet connection. This includes the use of bridge devices for secure offline payments. - Rulebook Development: The digital euro rulebook is being developed, with seven new workstreams established to cover various aspects such as risk management and user experience standards. A progress report on this will be published by the third quarter of 2024. - Engagement with Stakeholders: The ECB will continue engaging with the general public, conducting user research among consumers and merchants to ensure the digital euro meets user needs and is easy to use. Read the full report here - https://lnkd.in/gTG6_FmP For more updates on banking and finance, follow Global Regulatory Insights. #DigitalEuro #ECB #Fintech #Innovation #DigitalCurrency #CBDC #FinancialServices #GRI

The European Central Bank (ECB) has released its first progress report in its preparations for the launch of the Digital Euro. The ECB's Governing Council approved the launch of a preparation phase starting in 2023, following the initial investigation phase that began in October 2021. This phase will continue until 2025, when the ECB will decide whether to proceed with its Digital Euro plans. The newly released report details the current progress. A key priority for the ECB has been ensuring that any prospective Digital Euro guarantees user privacy, following a ‘privacy by design’ approach. The design includes offline functionality, offering a cash-like level of privacy where only the payer and the payee know the transaction details. This functionality allows transactions to be completed without internet access, provided the user has pre-funded their account. The ECB aims to ensure that digital transactions remain private, with issuers and payment infrastructure providers unable to directly link transactions to specific individuals. To achieve this, the ECB has been exploring pseudonymisation, hashing, and encryption of messages exchanged with and between Payment Service Providers (PSPs). Data exchanged between PSPs and the Eurosystem will also be segregated, preventing the Eurosystem from identifying end users directly. PSPs will only have access to online digital euro transactions to the extent necessary for compliance with relevant EU laws, including AML regulations. The ECB is also working on a Digital Euro rulebook. A Rulebook Development Committee (RDC) has been established to define the roles and requirements of all actors in a digital euro ecosystem. The initial rulebook draft covers functional and operational models, technical scheme requirements, and an adherence model outlining the rights and obligations of scheme members per draft legislation. You can find the report here: https://lnkd.in/d-KbCSHD (Image by GermanCouncil) #DigitalEuro #ECB #CBDC #FinTech #DigitalPayments #DigitalCurrency

💶 Digital Euro: #EDPB and #EDPS ensuring the highest data protection and privacy standards ���� Digital Euro Data Protection: The European Data Protection Board (EDPB) and the European Data Protection Supervisor (EDPS) have jointly issued an important opinion on the proposed Regulation for the digital euro, a central bank digital currency. 🛡️ Privacy Prioritization: The EDPB and EDPS applaud the proposed Regulation for addressing various data protection aspects of the digital euro, especially regarding offline payments to minimize personal data processing. 💡 Key Recommendations: They have made significant recommendations to ensure the highest standards of personal data protection and privacy. This includes minimizing data processing, preventing excessive centralization of personal data, and clarifying user identifier processing. 🔒 Data Protection Principles: The EDPB and EDPS emphasize the importance of clarifying the role and tasks of the European Central Bank (ECB), national central banks, and payment service providers (PSPs) in relation to data protection principles. 🌐 Monitoring and Guidance: They commit to monitoring and providing ongoing guidance in line with their respective responsibilities as this proposed Regulation develops. A strong commitment to data privacy and protection is crucial for building trust in the digital euro. This Joint Opinion ensures that data protection is at the core of the digital currency's design, both online and offline. #DigitalEuro #DataProtection #PrivacyStandards #EURegulation #Finance #DigitalCurrency

European Central Bank, ”Update on the work of the digital euro scheme’s Rulebook Development Group” This first draft of the rulebook is an intermediate version that covers, (i) the functional and operational model, which include the end-to-end flows describing the functioning of all use cases and services in scope of a digital euro, (ii) the technical scheme requirements, which depict the high-level architecture of a digital euro and some initial and proposed current market standards to be potentially also used for a digital euro and (iii) the adherence model of the digital euro scheme, which sets out the rights and obligations of scheme members in accordance with the legislative proposal. The document relies on input from the dedicated RDG workstreams with experts from the market participants on (i) authentication and identification, (ii) technical scheme and (iii) scheme compatibility. ——— #datasharing #globalsupplychain #crossboarderpayments #securefinancing #fraudprevention #tradefinance #tradematters #sustainability #digitaltrade #globaltrade #technology #LEI #digitalidentity #C4DTI #paperless #digitalidentities   #innovation  #digitalisation #paperlesstrade #digitaltransformation   #digitaltradechampion #digitaltradeevangelist  #internationaltrade #digital #crossbordertrade #cbdc #regtech #suptech #payments #innovation #banks #digitalrevenueimpact #risk #regulations #digital #m2mi #cybersecurity #risk #banking #embeddedfinance #openbanking #sustainablefinance #iot #money #bankofengland #digitaleconomy #fintech #multicurrency #privacy #artificialintelligence

#CryptoRegulation Update ⚡️The European Central Bank (ECB) has recently taken decisive steps towards bringing the #DigitalEuro closer to reality. → First order of the day - A crucial progress report by the Rulebook Development Group (RDG). The RDG is laying the foundation of what's poised to be the first public European digital payment system. Its goal? A seamless payment experience that fosters #innovation and healthy competition. With a draft rulebook in progress, the group is defining roles for every player in the ecosystem, from end users to intermediaries. → The ECB has also issued five calls for public tender to potential providers of digital euro services. The calls target several digital euro components, including alias lookup, fraud and risk management, app and software development, and more. While not a commitment to development yet, this selection process is preparing the Eurosystem to launch when the time is right, pending legislative approval. Read the progress report and find the relevant links for the public calls in the comments below ⤵ #ECB #RDG #Fintech

European Central Bank - Digital euro: the future of money Source: https://lnkd.in/gnhbWMCQ #digitaleuro #cbdc #digitalassets #emoney #future #money #europe Credits: piero cipollone Highlights: There is currently no European digital means of payment covering all euro area countries: 13 out of 20 euro area countries don’t have a national card scheme and instead rely on international schemes for digital payments, which settle 69% of all digital transactions in the EU A digital euro would fill this gap, providing a European digital means of payment accessible and accepted in all euro area countries A digital euro would provide a pan-European platform that would standardise digital payments in the entire euro area Digital euro payments could also be made using a physical card; cash can be used for digital euro funding/defunding Users would always have access to face-to-face technical support and the option to easily switch intermediaries In addition to payment service providers, selected public entities would also operate as intermediaries for users that do not have a bank account The Eurosystem would not be able to identify people based on the payments they make – it would only see a minimal set of pseudonymised data The Eurosystem would implement safeguards, including internal data segregation and auditing, to ensure high data protection standards The Eurosystem would adopt additional, innovative privacyenhancing techniques when ready and tested for large payments systems, fostering higher privacy standards for digital euro users

Could CBDCs give governments too much control over people's spending? Thus reducing privacy, especially in countries with strict governments? Well,it doesn’t have to be a trade-off between convenience and privacy. CBCDs make digital transactions accessible to more people, but they also mean governments can track our money more easily. This report discusses the benefits and challenges of implementing these digital currencies. Here are my key takeaways: 🔶 There are challenges of balancing objectives such as financial inclusion, privacy protection, and financial integrity when designing CBDC systems. 🔶 CBDC systems can be designed with anti-money laundering and combating the financing of terrorism (AML/CFT) measures integrated directly into their design. 🔶 Potential financial stability risks associated with CBDCs include the bank-sovereign nexus, asset quality concerns, and reliance on foreign deposits. 🔶 CBDCs improve the process of remittances for both senders and recipients. 🔶 Digital currencies can make cross-border payments easier by reducing costs and increasing transaction speed. 🔶 CBCDs can improve monetary policy transmission by allowing central banks to better control money supply and interest rates. 🔶 The introduction of CBDCs will create more competition among payment service providers to be more creative with their tech – which only means more financial stability for everyone. 🔶 Policymakers should consider tailored approaches when designing and implementing CBDCs. They should take into account the specific economic and financial conditions of each country or region, particularly, in the Middle East and Central Asia. When you weigh the pros and cons, I think it’s pretty clear that the benefits tip the scales in favor of adopting CBDCs. #CBCDs #Fintech #DigitalCurrency