January 29, 2023

The ECB is considering the possibility of creating a payment system for stablecoins from the Central Bank

The European Central Bank (ECB) announced the possibility of creating a simplified payment system for state digital currencies (CBDC) with user privacy protection.

After the publication of the study reportthe anonymity of state stablecoins, the European Central Banking System (ESCB) introduced the proof of concept (PoC), which was developed in conjunction with the R3 consortium and the consulting company Accenture.

The solution meets anti-corruption requirementsmoney laundering and terrorist financing (AML / CFT), while maintaining user anonymity and transaction history. The Central Bank and third parties will not be able to see transaction data without the consent of the user.

The report also identified a number of issues thatmust be decided before starting the system. We are talking about reducing the amount of information available to parties not involved in transactions, as well as the ability of users to have access to CBDC and spend digital currency without the participation of an intermediary.

ECB says confidentiality is possibleenhance by changing public keys and evidence with zero disclosure. Since PoC did not consider the possibility of scaling digital currencies, it is necessary to study their interaction with the real-time gross settlement system.

The ECB study addresses key issuesregulators' concerns regarding digital currencies. Earlier, the EU identified numerous risks associated with the adoption of stablecoins, and said that they could “undermine” the monetary sovereignty of European countries.