By Michael Scott
Five IBM Consulting members made a list of points to be considered by the European Commission (EC) to optimize its suggested digital euro law.
Via a recent blog post, IBM offered insight regarding what is needed to enhance the digital euro’s success. It highlighted five elements for designers to aid the European Central Bank (ECB) digital currency ‘penetrate the Eurozone’s extremely competitive, heterogeneous, and complex landscape.
IBM Insight Echoes EC Legislative Proposal on Digital Euro
Some of the proposed points are already contained in the EC legislative proposal. It proposes advancing the project on the existing rails as the first point forecasted in the European Commission plan. However, the authors claim that it can be extended. Further, they contended that simplicity would be vital during initial adoption, with familiarity reinforcing that.
Intermediaries will play a crucial role in accepting the digital euro, and the digital currency’s design should consider their needs. IBM illustrates that the situation would likely translate to granular ecosystem of intermediaries.
The digital euro’s future intermediary landscape needs to be envisaged as multi-level. Besides, integration multiple intermediaries between a retail user and elements of the ECB digital euro would improve the support for smaller intermediaries. The post claimed that API standardization eases integration and promotes competition.
IBM Support Harmonization of Privacy Rules and Reporting Thresholds
IBM suggested that the European Commission proposal entails robust privacy guarantees that can be extended to online activities to promote end-to-end transaction privacy. The suggested legislation provides privacy actions that adhere to the present digital payment’s privacy levels. According to IBM, privacy rules should be harmonized with current laws, which include reporting thresholds, to ensure siloed reporting.
The authors noted that distributed ledger technology is unimportant in creating a digital euro. However, blockchain technology provides the highest number of benefits. They also added that operations should not exceed the carbon-intensive relative to the non-blockchain systems.
Finally, IBM suggests the need to move slowly but surely. This should involve starting with a small feasible product for a quicker time to market and a sandbox to address the greatest intricacy of the future operating environment of the digital euro.