AI to Safeguard the Digital Euro Rollout
The European Central Bank (ECB) has chosen the artificial intelligence firm
Feedzai to lead fraud prevention efforts as the Digital Euro prepares for public introduction in 2025. This partnership aims to address growing concerns about fraud and security associated with central bank digital currencies.
Key Facts About the Digital Euro Initiative
- The Digital Euro will operate using the N€XT settlement engine, leveraging a blockchain-inspired UTXO model for enhanced traceability and privacy.
- The ECB has conducted extensive testing of both online and offline payment scenarios, with special attention given to privacy and security requirements.
- The Digital Euro aligns with significant European regulations, including PSD2, DORA, and the Digital Euro Regulation Proposal, ensuring robust risk management frameworks against fraud, cyber threats, and third-party dependencies.
- Privacy remains a design priority: end-user balances and payment patterns are not tracked by the Eurosystem, and privacy-preserving transaction checks are implemented, especially for low-value transfers.
How Feedzai’s AI Will Be Applied
The selection of
Feedzai—an AI-driven financial risk management platform—marks a crucial step for the ECB to enhance the security infrastructure of the Digital Euro. Feedzai’s platform uses advanced AI and machine learning algorithms capable of detecting suspicious patterns and potential fraud in real time, addressing new risks that may arise with the rise of central bank digital currencies.
Industry Impact and Next Steps
- Feedzai’s tools will support certified payment service providers integrating with the Digital Euro Scheme Rulebook, ensuring only secure and compliant operators participate in the system.
- The ECB continues to consult with nearly 70 market participants on technical innovations and financial inclusion strategies for the Digital Euro’s wider rollout.
- Ongoing rounds of testing and regulatory review are set to continue through the end of 2025, as the ECB targets the highest possible standards of security and usability.
Conclusion
As the Digital Euro approaches its official launch, the ECB’s agreement with
Feedzai demonstrates a clear commitment to protecting users from digital financial crime. The integration of AI-powered fraud detection is expected to provide the resilience and trust necessary for Europe’s transition to a digital currency era.
