The European Central Bank (ECB) recently announced a call for vendors to provide services and components for the prospective digital euro, with potential contracts totaling over €1 billion.
This initiative follows the ECB’s transition from the investigation to the preparation phase of the digital euro project, which began in October. However, a final decision on the digital euro’s launch has not been made.
The ECB seeks applications for five key components: the alias lookup component, the fraud and risk management component, the app and SDK components, the offline services component, and the secure exchange of payment information component. These components have an estimated framework budget of €1.1 billion, which does not include the internal sourcing of core central bank digital currency (CBDC) settlement systems within the Eurosystem.
The largest allocated budget is for the offline CBDC component, valued at €220.7 million, with a maximum framework agreement value of €662.1 million. This component aims to provide an ‘offline bearer payment instrument,’ addressing the significant security challenges of offline payment systems.
Another notable component involves managing an alias for digital euro transactions. This feature will allow end-users to make or receive payments using identifiers like phone numbers, email addresses, or account numbers without direct ties to a payment provider, utilizing a Digital Euro Account Number (DEAN) mapping table.
The ECB has also updated the digital euro rulebook and set a four-year duration for these contracts, commencing in January 2025. Application deadlines vary, with the shortest being 8 February for the risk and fraud management project.
This initiative reflects the ECB’s ongoing efforts to modernise the Eurosystem’s financial infrastructure and adapt to the evolving digital economy, while addressing concerns from banks about maintaining the compatibility of digital euro services with existing banking offerings.