FILE PHOTO – The headquarters of the European Central Bank (ECB) in Frankfurt protrudes from behind a stele with the ECB logo. (is associated with: «Nexi and Deutsche Telekom win major contract for digital euro») Arne Dedert/dpa
Italian payment service provider Nexi and Deutsche Telekom have been awarded a joint contract for core connectivity services of the digital euro, as the European Central Bank (ECB) moves forward with preparations for an EU digital currency.
The bidding consortium of the two providers will receive a 10-year contract, while Spanish telecommunications group Telefónica was selected as the second independent network service provider, the ECB said on Friday.
With this dual award, the ECB aims to guarantee operational resilience and prevent monopoly dependencies regarding the connection.
The Nexi Group, listed on the Milan Stock Exchange, is among Europe’s leading PayTech corporations and provides digital payment infrastructures, card terminals and settlement solutions for banks and merchants.
Together with Deutsche Telekom, the company is tasked with building and operating a highly scalable and fail-safe network.
This will connect the data centres of the future platform for services surrounding the digital euro, while also ensuring secure data access for commercial banks, payment service providers and the national central banks of the Eurosystem.
However, the contract award for connectivity services is only one component of the currency guardians’ technical procurement initiative.
Beyond the line network, the ECB has put five other core component packages for the system architecture out to tender.
These include software solutions for fraud and risk management; a directory service for resolving aliases via telephone number or email address; mechanisms for the secure exchange of transaction data; systems for settling offline payments without an active internet connection; and the development of a standardized reference app.
Digital euro to supplement cash
The ECB has been tinkering with a digital variant of the single European currency for years, intending for it to supplement euro cash and not replace it.
Currently, US providers such as PayPal, Mastercard and Visa heavily dominate the digital payments market in Europe. With a digital euro, the euro central banks want to counter them with a European alternative.
The ECB is targeting a rollout of this alternative to cash for 2029, with the launch of a digital euro pilot project scheduled for 2027. For this to happen, however, the legal framework for the digital euro must be established.
A legislative draft by the European Commission is still being negotiated in the European Parliament, though a vote originally planned for May could be delayed, according to Germany’s Handelsblatt financial newspaper.