COTI Chosen by ECB for Digital Euro Development

COTI, a privacy-centric layer-2 solution on Ethereum, has been chosen by the European Central Bank (ECB) to contribute to the development of the digital euro. This partnership is part of the ECB's broader initiative to explore and implement a central bank digital currency (CBDC) for the eurozone, with a targeted launch by 2026. COTI's involvement in this project is a significant milestone, following its successful participation in the Bank of Israel’s digital shekel project, which underscores its growing expertise in CBDC solutions.

COTI's role in the ECB's project will focus on integrating its privacy-focused technology to support "conditional payments." This system ensures that the provenance of assets is verified before transactions take place, enhancing both transparency and privacy. COTI's solution, based on Soda Labs’ Garbled Circuits, offers an on-chain approach to privacy that maintains confidentiality throughout the transaction process. This technology is expected to provide more secure and private transactions for all eurozone residents, aligning with the ECB's goals for the digital euro.

Shahaf Bar-Geffen, COTI co-founder and CEO, expressed that the invitation to join the ECB marks a testament to the expertise and hard work of the COTI team. He emphasized that privacy has become a vital component for the future of web3, highlighting the importance of COTI's contributions to the digital euro project. The ECB's selection of COTI as a pioneer partner reflects the growing recognition of the need for robust privacy solutions in the development of CBDCs.

The digital euro project aims to integrate the new currency into retail payment systems, ensuring seamless adoption and usage. COTI's technology will be instrumental in testing the implementation of the conditional payment system, which is designed to provide more transparent and private transactions. This collaboration is expected to shape the future of EU CBDC, leveraging COTI's innovative blockchain technology to enhance the digital euro's functionality and security.

The ECB's initiative to develop the digital euro comes at a time when there is increasing global interest in CBDCs. A senior French central banker had previously cautioned about the potential impact of U.S. policy shifts supporting stablecoins on European monetary sovereignty. This underscores the importance of the digital euro project in maintaining Europe's financial independence and sovereignty. COTI's involvement in this project is a significant step forward in achieving these goals, demonstrating the potential of blockchain technology in shaping the future of digital currencies.