Digital euro payments will be handled by private banks
The European Central Bank plans to designate credit institutions as intermediaries, oversee them and handle the issuance of digital cryptocurrency
Credit institutions and payment service providers will process payments and manage other services related to the digital euro, according to a new ECB progress report on the digital currency. The document describes the role these institutions will play in the digital euro payment system.
The report, published Dec. 21, says the central bank will oversee intermediaries and handle issuance of the digital currency. The ECB will be responsible for any errors in the settlement of this currency. Therefore, the regulator notes, it is important for it to maintain full control over the issuance and settlement of digital euros.
The best way to achieve this goal, according to the bank, is to entrust intermediaries under the supervision of the ECB to act as "direct counterparties for individuals, retailers and businesses" when dealing with the digital euro and supervise them.
Their responsibilities will include providing services such as opening accounts or wallets, payment instruments, registration and deregistration, including KYC/AML procedures.
In addition, intermediaries will be responsible for digital euro transaction management tasks. These include initiation, authentication, confirmation and post-transaction actions, including reconciliation.
The ECB is conducting a study on the digital euro, which should be completed in October 2023. After that, the development and testing of the digital euro may begin, ECB executive board member Fabio Pannetta previously reported.