The European Central Bank (ECB) has released its first progress report on the development of Central Bank Digital Currency (CBDC). Published on X date, the report contains detailed information on technical measures such as encryption and hashing to protect the privacy of individual transactions and ensure data security. It also calls for payment service providers to obtain explicit consent from users before using financial data for commercial purposes, in order to enhance transparency and trust.
One key feature of the European Central Bank’s digital euro project is support for offline transactions, enabling direct peer-to-peer transactions without intermediaries. This functionality will utilize advanced payment devices such as smartphones and dedicated smart cards, which can operate on battery power and synchronize transactions with the blockchain once online connectivity is restored. This is expected to improve accessibility and availability, particularly in areas with unreliable internet access.
In addition to technical considerations, the European Central Bank is engaging in extensive consultations through its rule-making task force, involving stakeholders ranging from service providers to the general public. This approach aims to shape the regulatory framework and technical standards for CBDC, with the first comprehensive draft of the rulebook planned for release by the end of 2024.