Last week the European Central Bank (ECB) provided a status update on the design of an offline digital euro. The draft legislation for the central bank digital currency (CBDC) requires that the offline version be privacy preserving. The report covers details about the devices to be used and some of the challenges. Unlike the online wallet, there will be a single technology provider for the offline solution, which needs to integrate with apps provided by payment service providers.
The digital euro offline solution is meant to be cash-like and doesn’t involve intermediaries, so there’s no anti-money laundering (AML) when it comes to transactions. However, the ECB notes that this is “subject to legislation excluding (it) from AML monitoring.” Hence, AML will need to be conducted during the wallet’s funding and defunding.
There are numerous ways to top up, including using an ATM, a bank branch or retail outlet. Using a mobile phone wallet, the user can switch some of their online digital euro into the offline digital euro balance.
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