Europe Accelerates Digital Euro System Establishment..."No Need for Visa or Mastercard"

▲ Digital Euro, Mastercard, Visa/AI Generated Image

The European Central Bank (ECB) is building the digital euro as an open standard. The aim is to break the payment market monopoly of U.S. companies like Visa and Mastercard. It embodies a strong will to secure the self-reliance of the European payment market.

According to BeInCrypto on April 24 (local time), the European Central Bank signed cooperation agreements with major European technical standard-setting bodies. ECPC, nexo standards, and the Berlin Group participated in this agreement. The ECB decided to utilize commercially widely used open technologies instead of a proprietary system.

The European payment network is currently dominated by major U.S.-based card companies such as Visa and Mastercard. If the digital euro is implemented as an open standard, European financial institutions will be able to offer their own payment services. This will enable the establishment of a payment system that does not rely on specific external companies.

From a technical perspective, three core standards will form the foundation of the digital euro. ECPC's CPACE standard handles communication between contactless payments and smartphone wallets. Nexo standards' specifications connect point-of-sale (POS) systems in stores with payment service providers' infrastructure. The Berlin Group's standard supports money transfers, balance inquiries, and in-app payment functionalities.

By reusing existing infrastructure, implementation costs can be significantly reduced. The ECB's analysis estimates the investment costs for eurozone banks to be approximately 4 billion to 5.8 billion euros. Payment terminals already certified with CPACE can process digital euro payments without hardware replacement.

Through this measure, Europe aims to reclaim payment sovereignty and accelerate financial innovation. The digital euro aims to be a public good payment method that anyone can use for free. The creation of an open standard-based ecosystem will lead to increased consumer convenience. The ECB is preparing for the successful establishment of the digital euro while simultaneously advancing its technology.

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