IBM Provides Key Recommendations for a Successful Digital Euro Implementation
Summary:
IBM shares its suggestions for the successful implementation of the digital euro, highlighting the need for simplicity, accommodating intermediaries, standardizing APIs, ensuring privacy, and considering blockchain technology. Their advice includes starting with a minimal viable product and a sandbox approach.
IBM Shares Ideas for Successful Digital Euro Implementation
IBM recently shared its suggestions in a blog post for designers to ensure the success of the digital euro, which is the European Central Bank's digital currency. According to IBM, there are five important factors that must be considered to make the digital euro thrive in the diverse and competitive payment landscape in the Eurozone. Some of these points are already incorporated into the European Commission's legislative proposal, such as building on existing payment systems. However, there is room for expansion. The authors emphasized the significance of simplicity and familiarity to drive initial adoption.
Intermediaries' Role in the Acceptance of the Digital Euro
IBM believes that intermediaries will play a crucial role in the acceptance of the digital euro. To accommodate their needs, the digital currency should be designed in a way that supports a more detailed ecosystem of intermediaries. The authors highlighted the importance of planning for multiple intermediaries between the retail user and the ECB's digital euro components, which would particularly benefit smaller intermediaries.
Importance of Standardization in Integration and Competition
IBM stressed the significance of standardizing application programming interfaces (APIs) to facilitate integration and foster healthy competition. By implementing standardized APIs, the process of incorporating the digital euro into existing systems would become more streamlined and efficient.
Privacy Measures and Harmonization
IBM suggested extending the strong offline privacy guarantees of the proposed EC legislation to online activities to ensure end-to-end transaction privacy. They emphasized the importance of harmonizing privacy rules with existing regulations, including reporting thresholds, in order to prevent information leakage and maintain data silos.
Blockchain's Potential Benefits in the Digital Euro
While distributed ledger technology is not essential for the creation of a digital euro, IBM highlighted the benefits of using blockchain technology. They claimed that blockchain systems can offer numerous advantages without being more carbon-intensive than non-blockchain systems.
IBM's Advice: Proceed Slowly but Surely
IBM advised a gradual approach to the implementation of the digital euro. They suggested starting with a minimal viable product to expedite time to market and establishing a sandbox to address the complexities associated with the future digital euro's operational environment.
Published At
8/31/2023 9:34:10 PM
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