Author: Derek Andersen, Cointelegraph; Translation: Song Xue, LianGuai
IBM recently shared some ideas on how to make the digital euro a success. It proposed five suggestions for designers to help the European Central Bank (ECB) digital currency “compete in the competitive, diverse, and heterogeneous payment landscape of the euro area”.
Some of IBM’s views have been found in legislative proposals by the European Commission (EC). The EU plans have already anticipated the first point of “building on existing tracks”, although it could be extended. They believe that simplicity will be key to initial adoption, and familiarity strengthens this point.
Intermediaries will also play a role in the acceptance of the digital euro, and the design of the digital currency should meet their needs:
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“We believe that a more sophisticated intermediary ecosystem is needed. The future intermediary landscape for the digital euro should be multi-tiered. Planning multiple intermediaries between retail users and the ECB digital euro components will better support smaller intermediaries.”
The post states that standardizing APIs will simplify integration and encourage competition.
Possible intermediary plan for the digital euro. Source: Digitale Perspective
IBM states that the EC proposal includes strong offline privacy guarantees that can be extended to online activities to ensure end-to-end transaction privacy. The proposed legislation provides privacy measures that are “consistent with the privacy level of current digital payments”. IBM states that privacy rules need to be coordinated with multiple existing regulations, including reporting thresholds, to ensure that reporting is isolated.
The author points out: Distributed ledger technology is not essential for creating the digital euro, but blockchain technology offers the greatest benefits. They also add that its operation does not require a higher level of carbon intensity than non-blockchain systems.
Finally, IBM suggests proceeding slowly but steadily. Start with the minimum viable product to speed up time to market and use sandboxes to address the immense complexity of the future digital euro operational environment.
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