ECB Announces Proof-of-Concept for EUROchain Distributed Ledger
FRANKFURT – The European Central Bank (ECB) is announcing an in-house blockchain platform called EUROchain, being developed by R3 and Accenture, and it will also act as the distributed ledger supporting Eurozone’s own digital currency.
The fourth issue of ECB’s “In Focus” research, called “Exploring Anonymity in Central Bank Digital Currencies” (CBDCs), includes the first public announcement of the European Central Bank regarding the development and implementation of a digital Euro.
According to the official research paper that was posted on ECB’s web portal last week, the distributed ledger will be based on R3’s Corda private blockchain and initially, it will act as a base to study how privacy can be balanced with compliance procedures, such as anti-money laundering (AML) regulations.
ECB trying to stay ahead of the fintech game
I can’t really say that is something that caught us by surprise, especially when considering previous analogous statements by main EU country members such as Germany and France, who stressfully urged to announce that Europe was also working on its own “Bitcoin” when news about Facebook’s Libra and China’s CBDC the Digital Currency/Electronic Payments system broke earlier this year.
Besides testing a healthy mix of transparency and anonymity, and the ECB is also focusing on faster delivery times of international monetary settlements. In a previous post, ECB cited that if local private fintech companies fail to provide an immediate solution to near-real-time cross-border payments, the central bank would take action to stay ahead of the global economic curve.
Unlike other CBDCs and stablecoins that intend to offer their services to the end-consumer and retail shops, EUROchain’s product, similar to FedNow, and Payments Canada, will strive to empower fast and secure settlements interconnecting central banks and businesses across the world, hence choosing R3 as the blockchain architect makes perfect sense.
R3 is known for its maturity when it comes to enterprise-level custom-made blockchains and has excessive experience with central banks and triple-A international businesses, including Bank of America, Mastercard, the British HSBC, and the Dutch ING.
Europe’s move to stay competitive with its Asian fintech rivals might be the right move at this moment, considering that China’s CBDC was allegedly going in beta before the end of the year (thing unlikely at this point), and Facebook’s planned rollout for 2020, which I believe despite regulatory concerns, will eventually make it to the broader market, essentially offering Libra to some over 2bn Facebook users.