European Central Bank Takes Step Toward Blockchain-Based Payments System

The European Central Bank is making more efforts to develop a payment system based on blockchain technologies, which could result in the creation of the country’s largest economic policymaker, who will eventually design a central bank digital money, or CBDC.

The electronic payment system action, announced Thursday by the ECB, will move out in two stages. &nbsp,

The eurozone’s economic power will create and use a payment program for settlements made in central bank funds in the first stage through an connectivity connection with the Trans-European Automated Real-Time Gross Settlement Express Transfer program. The free flow of cash, security, and assets across the euro is facilitated by TARGET, a payments negotiation program.

In the second phase, the EU financial authority did explore” a more included, long-term solution” for towns of central bank money-denominated trades on a blockchain.

Executive Board associate Piero Cipollone said on Thursday in a statement that” this is an important factor to enhancing Western financial business efficiency through innovation.” &nbsp,

By providing the infrastructure for its monetary authority to issue a modern euro, a properly issued cryptocurrency that would allow Europeans to generate quick and secure online payments across western Europe, the ECB said its embrace of “innovative solutions” like blockchain technology may shape the eurozone’s fiscal future.

According to the ECB website, the digital euro project is a part of the ECB’s larger goal to establish a single market for capital across Europe. By reducing regional banks ‘ reliance on non-European payment service providers, the CBDC would, according to project supporters, strengthen the eurozone’s economic strength and strengthen the region’s autonomy and monetary sovereignty.

Road to the digital euro&nbsp,

In 2021, the ECB began looking into the design and distribution models for the digital currency as part of its plans to develop a digital currency. The Central Bank made a list of priorities for the first phase of its digital euro project a couple of years later, signaling it would take more concrete steps in implementing its plans to issue a CBDC.

Amid its project’s first phase, the ECB will continue ironing out the details of its blockchain-based payments system. According to its statement, the Central Bank will also work with public and private stakeholders to customize the new system to the needs of Europeans. The ECB further stated that the project’s progress will be “in due course.”