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IBM has some ideas about what it will take to make the digital euro a success, which it shared in a recent blog post. It suggested five items for designers to help the European Central Bank digital currency \u201center the highly competitive, multifaceted, and heterogeneous payments landscape in the Eurozone.\u201d<\/p>\n
Some of the IBM points are already found in the European Commission (EC) legislative proposal. \u201cBuild on existing rails,\u201d the first point, is already foreseen in the EC plan<\/a>, although it can be extended, the five authors\u00a0said<\/a>. Simplicity will be key to initial adoption, they reasoned, and familiarity reinforces that.<\/p>\n Intermediaries will also have a role to play in digital euro acceptance, and the digital currency should be designed to accommodate their needs:<\/p>\n \u201cWe see a need for a more granular ecosystem of intermediaries. The future intermediary landscape for the digital euro should be envisioned as multi-level. Planning for more than one intermediary between the retail user and ECB\u2019s digital euro components would better support smaller intermediaries.\u201d<\/p><\/blockquote>\n Standardization of application programming interfaces (APIs) would simplify integration and encourage competition, it said.<\/p>\n The EC proposal includes strong offline privacy guarantees that could be extended<\/a> to online activities to ensure end-to-end transaction privacy, IBM suggested. The proposed legislation offers privacy measures \u201cconsistent with current digital payment\u2019s privacy levels.\u201d IBM said privacy rules need to be harmonized with several existing regulations, including reporting thresholds, to ensure that reporting is siloed.<\/p>\n Related: UK financial watchdog announces launch of permanent Digital Sandbox in August<\/a><\/em><\/strong><\/p>\n Distributed ledger technology is not essential for the creation of a digital euro, the authors noted, but blockchain technology offers the most benefits. Its operation need not be any more carbon-intensive than non-blockchain systems, they added.<\/p>\n Finally, go slowly but surely, IBM advises. Start with a minimal viable product for faster time to market and a sandbox to deal with the great complexity of the future digital euro\u2019s operating environment.<\/p>\n Pixel Perfect. <\/p>\n Take a look at IBM headquarters from around the globe. #WorldPhotoDay<\/a><\/p>\n \u2014 IBM (@IBM) August 19, 2023<\/a><\/p><\/blockquote>\n\n