The European Central Bank (ECB) and Eurosystem have begun searching for firms to participate in a prototype exercise for customer-facing payments services, indicating that progress on the digital euro will continue.

Payment service providers, banks, and other relevant firms were reportedly encouraged to express interest in the initiative.

The Eurosystem, which consists of the ECB and the national central banks of euro-area nations, announced that it will choose up to five front-end providers based on their capabilities and use cases. While previous relevant expertise in the services is not needed, it will be taken into account throughout the selection process.

The prototype providers will be asked to provide front-end apps that adhere to the system’s current backend and interface criteria.

They will be able to give input on the current system, including how it might satisfy their technical needs, and they will be able to suggest new value-added services. 

Participants will not be compensated for their work, but they may be included in future phases in the creation of the digital euro.

The project’s submission deadline is May 20, 2022. The project will begin in August and be completed in the first quarter of the following year. In October 2023, the investigational phase of the digital euro experiments will come to an end.

The Eurosystem Governing Council is likely to make a decision on the creation of a real-world digital euro central bank digital currency at that time (CBDC).

This is the latest in a long line of measures toward a digital euro, which has been contentious at times. More than 11,000 individuals responded to the European Commission’s digital euro effort earlier this month, with citizens raising worries about monitoring and government overreach.

Nonetheless, Fabio Panetta, a member of the European Central Bank’s executive board, has stated that creating a digital euro is “likely to become a necessity.”