The European Central Bank (ECB) recently announced that it is working on a blockchain-based platform called EUROchain, developed by R3 and Accenture, which will also be the support base for a new digital currency supported by Eurozone members.
The announcement was reported on both the ECB's official web portal and the fourth issue of the ECB's "In Focus" research, called "Exploring Anonymity in the Central Bank Digital Currencies" (CBDCs). This is the first time that a concrete commitment by the ECB to develop and implement a digital version of the Euro has been declared.
As reported by the official announcement, the distributed registry will rest on Rope, the private blockchain of R3, and will initially serve as a case study to understand how the right to privacy and compliance rules can be agreed, such as, for example, those dictated by the anti-money laundering legislation (AML).
The ECB is attempting to keep up with FinTech
It cannot be said that it was unexpected news, especially if we recall the previous declarations on this issue by some of the main EU member states, such as France and Germany, who felt the urge to let the world know that even Europe is working on its own "Bitcoin", reacting to the speed with which some large global projects such as Libra or the Chinese Central Bank Digital Currency (CBDC) are growing.
After testing a healthy mix of transparency and anonymity, the ECB is now aiming to speed up the implementation time of an international monetary regulation. In a previous post, the ECB says that if local private fintech companies fail to provide an immediate solution to instant cross-border payments, the bank will take steps to align with the global economic curve.
Unlike other CBDCs and stablecoins that intend to offer their services to the final consumer and retail stores, EUROchain research, similarly to FedNow and Payments Canada, will work to enhance the procedures that connect banks and businesses around the world, making them faster and safer. And in this sense, the choice of R3 and its blockchain architecture is an excellent move.
Who is R3
R3 is known for its reliability when it comes to developing company-friendly blockchains, and has considerable experience with central banks and triple A businesses, including Bank of America, Mastercard, British HSBC and Dutch ING.
Europe is moving to remain competitive against its Asian fintech rival, and it could be the right move at the moment, considering the development of the Chinese CBDC and the planned launch of the Facebook Libra for 2020, which despite the difficulties in adapting to the regulation, it will probably manage to reach a very large market, essentially offering Libra to over 2 billion users worldwide.