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– According to an official ECB release, the technical specifications of the request address three different aspects of integration.

ATM interoperability will provide users with the ability to convert physical cash into digital euros and vice versa using existing machines, ensuring a seamless transition between the two forms of money issued by the central bank. This exchange feature is critical for adoption. A digital euro that is not available through the familiar physical infrastructure will face a higher barrier to adoption than one that fits into the current cash withdrawal experience.

The second area is compatibility with card terminals. The ECB is looking for experts to develop standards that will allow existing debit and credit card machines to accept digital euro payments via contactless NFC technology or QR codes. The network of POS terminals in the Eurozone includes millions of devices. Integrating this feature into the existing infrastructure, rather than requiring merchants to replace it, is the only commercially viable route to widespread retail adoption.

The ability to operate in standalone mode is the third and most technically challenging requirement. The ECB aims for digital euro transactions to be able to take place without an internet connection, allowing private-to-private transfers and trade settlements in the absence or instability of connectivity. Offline CBDC transactions need a significantly different technical device compared to online transactions, as they involve pre-loading the value stored on the device rather than real-time register settlement. This requirement is also closely linked to the ECB’s privacy obligations. Low-value offline transactions are an area where the ECB has committed to guaranteeing privacy similar to cash, meaning that the central bank will not access personal information on these particular payments.

The call for experts follows a statement by the European Parliament on March 17, where preliminary agreement was reached on a legal framework establishing the status of the digital euro as legal tender.

This legislative move removes a significant uncertainty that had been holding back technical preparation work. Infrastructural merger planning is easier when the legal status of the instrument to be integrated is already established.

March 18, the ECB confirmed that the cash confidentiality obligation only applies to low-value, non-networked transactions. This separation is intentional.

Online transactions involve the intermediary infrastructure of commercial banks and payment operators, which have their own regulatory responsibilities. The offline privacy guarantee concerns the type of payments that are most similar to physical cash, where there are no intermediaries.

the ECB is testing a storage limit, which is expected to be set at around 3,000 per user, to prevent a massive outflow of funds from commercial banks’ current accounts to digital euro wallets. This restriction is aimed at addressing the so-called bank runaway risk associated with the implementation of CBDC, which financiers and bank supervisors have been talking about. If households can store unlimited amounts of digital euros directly with the central bank, the motivation to keep deposits in commercial banks will weaken, especially in times of financial instability when the central bank’s balance sheet is perceived as more reliable.