The European Central Bank (ECB) is accelerating its preparations for a potential digital euro by selecting Portuguese artificial intelligence specialist Feedzai to develop a crucial fraud prevention system. This strategic move underscores the ECB’s commitment to bolstering the euro zone’s financial sovereignty and mitigating risks associated with digital currency transactions. The substantial contract, with a potential value reaching up to €237.3 million, signifies a significant investment in safeguarding the integrity of its future digital currency.
Feedzai, operating in collaboration with its subcontractor PwC, will engineer an advanced AI model designed to evaluate the fraud risk of digital euro payments. The system will achieve this by analyzing deviations from established customer behavioral patterns, historical transaction data, and interaction histories. The objective is to equip payment service providers with a robust tool to make informed decisions regarding the approval or rejection of digital euro transactions, which will be conducted through electronic wallets directly supported by the central bank.
This four-year agreement, with an estimated initial value of €79.1 million and a ceiling of €237.3 million, is part of a broader initiative by the ECB. In addition to Feedzai’s contract, several other significant agreements have been finalized, totaling hundreds of millions of euros, with companies like French IT consulting firm Capgemini. These framework agreements ensure that the ECB incurs no costs until the project phases actively commence, providing flexibility and cost efficiency as the digital euro project progresses.
The ECB’s pursuit of a digital euro is framed as a strategic imperative to counter the pervasive influence of established payment networks such as Visa and Mastercard. Furthermore, it represents a proactive response to initiatives, including those championed by U.S. President Donald Trump, that promote stablecoins pegged to the U.S. dollar. The central bank anticipates securing legislative approval for the digital euro around mid-next year, with a targeted launch in 2029.
Feedzai, headquartered in Coimbra, Portugal, has established itself as a significant player in the payment security landscape, processing an estimated $8 trillion in payments annually for a diverse clientele, including Novobanco and Wio Bank. Its expertise in AI-driven fraud detection is poised to be a cornerstone in the ECB’s efforts to ensure a secure and reliable digital euro ecosystem.
Tyler Matthews, known as “Crypto Cowboy,” is the newest voice at cryptovista360.com. With a solid finance background and a passion for technology, he has navigated the crypto world for over a decade. His writing simplifies complex blockchain trends with dry American humor. When not analyzing markets, he rides motorcycles, seeks great coffee, and crafts clever puns. Join Crypto Cowboy for sharp, down-to-earth crypto insights.