Yesterday the European Central Bank issued five calls for vendor applications for services relating to digital euro components. A key takeaway is the framework budget is €1.1 billion ($1.2bn) for these five components. That does not include the core central bank digital currency (CBDC) settlement system which will be ‘sourced internally’.
Additionally, the ECB published updated progress on the digital euro rulebook.
| Digital euro contract budgets | Value € million | Max value of framework agreement € million |
| Risk & fraud management | 79.1 | 237.3 |
| App and SDK | 76.8 | 153.6 |
| Offline Solution | 220.7 | 662.1 |
| Secure exchange of payment data | 27.6 | 55.2 |
| Alias lookup | 27.9 | 55.8 |
| Total | 432.1 | 1,164 |
Banks have worried that the Eurosystem would impose a wallet independent from their bank offerings. However, the app and software development kit (SDK) component will “support intermediaries in the provision of digital euro services through their own mobile apps and online interfaces”.
It also established that the ECB will only make a digital euro launch decision once the legislative process is completed. However, that goes without saying.
The ECB estimates that all the contracts will run for four years with a start date of January 2025. There’s not a huge amount of time to apply. The risk and fraud management project has the shortest deadline, closing on February 8. Each contract has a different closing date in February.
The offline CBDC has by far the largest budget with a €220.7 million value and a maximum framework agreement value of €662.1 million over the four years. It describes the solution as providing an ‘offline bearer payment instrument’. It’s hardly surprising that this has a substantial budget. The security of offline payment systems presents a major challenge (and liability risk).
Use of an alias
Anyone who has used cryptocurrencies will be aware of the cumbersome nature of wallet addresses. One of the digital euro contracts relates to the management of an alias. The digital euro will enable end users to make or receive payments using an alias such as a phone number, email address or account number without any association with a payment provider. This requires a Digital Euro Account Number (DEAN) mapping table to associate an end user (and their alias) with a specific payment provider.
