COTI Joins CBDC Project as “Pioneer” of ECB’s Digital Euro

As just announced by the European Central Bank, COTI will take part in the European Central Bank (ECB) project to develop technology in support of the Digital Euro, a euro-wide CBDC. COTI is one of a number of selected Pioneer Partners comprising well-known organizations in the payments and technology space, including Accenture, KPMG, and TATA. This development follows COTI’s involvement in the Bank of Israel’s Digital Shekel trials, confirming continuing interest in COTI’s privacy technology by institutions as a solution for CBDCs.

CBDCs: A Major Use Case For Private Transactions

The ECB is targeting the beginning of 2026 for the Digital Euro launch. Between now and then, it will seek to select infrastructure providers. The ECB project provides the opportunity for participants to gain familiarity with the proposed Digital Euro interfaces. Pioneers will then work to demonstrate how a conditional payments system could be implemented on a technical level.

“Conditional payments” refers to the need for the provenance of assets to be verified before exchange. COTI’s signature technology, a privacy solution based on an on-chain implementation of Soda Labs’ Garbled Circuits, offers an ideal solution for ensuring the authenticity of real-world assets without revealing sensitive information at any point in the user journey. COTI will begin using simulated technical infrastructure for the Digital Euro, provided by the ECB, to test how its solution to conditional payments will work.

“Being invited to work with the ECB on such a consequential project is humbling, and a testament to the expertise and hard work of the COTI team. Privacy is a vital component for the future of Web3, ensuring users’ security and organizations’ compliance, and the same benefits apply to CBDCs. It’s critical that confidentiality is built into the core of these new systems, not merely added as an afterthought.” — Shahaf Bar-Geffen, COTI co-founder and CEO.

The ECB project will be COTI’s second CBDC project, after tackling the Digital Shekel Challenge for the Bank of Israel last year, where COTI developed a proof-of-concept for trustless transactions across borders and between different currencies via a decentralized marketplace. The system is designed to be powered by CBDCs and uses garbled circuits — a fast, lightweight approach to decentralized confidential computing (DeCC) — to maintain on-chain confidentiality between the different users involved.

The ECB is creating an innovation platform to collaborate with stakeholders, who will include large and small merchants, banks and other payment service providers, fintech companies, financial institutions, research institutes, technical experts, and universities.

At present, activities will focus on use cases in retail payments, particularly conditional payments, as the Bank prepares for the deployment of a Digital Euro. This would be a digital form of cash, complementing the use of coins and notes, and would be available to everyone within the euro area. As well as being secure and private, one of the benefits would be the ability to make payments across the $15 trillion euro-wide economy; at present, there is no digital payment option that covers the entire euro area.

We will provide updates as the initiative progresses, offering insights into the collaborative effort to shape the future of digital currency in the euro area.

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