The European Central Bank (ECB) has awarded framework contracts to five companies to provide consultancy on its digital euro explorations.
Global Government Fintech reported that the ECB had kicked off a €20m (about £17.2m) tender for design and business model support in the first quarter of the year and can now report that the process has concluded with Accenture, Bearing Point, Deloitte Consulting, Oliver Wyman and Roland Berger emerging triumphant.
The contract award notice for digital euro consultancy has been published with the Frankfurt-based authority a couple of months beyond the mid-point of a two-year ‘investigation phase’ into the possibility of a central bank digital currency (CBDC) for the 19-member eurozone – a period during which it has sought the expertise of a growing number of private-sector individuals and companies, most recently appointing five firms to develop user-interface prototypes.
‘Through this negotiated procedure the ECB was seeking suppliers for the provision of consultancy services for digital euro design, business model and realisation with regard to the investigation – and eventually realisation – phase of a digital euro,’ the contract award notice states, adding that the ECB awarded the framework contracts to suppliers ‘offering the best value for money’.
‘Through this procurement, the ECB was seeking to acquire strategic partners for consultancy services that allow the delivery of excellent, strategic capabilities to support solving complex questions that are not only new to the ECB but also globally in the context of central banking digital currencies (CBDCs),’ the notice explains (a restatement of the original procurement notice), adding that services to be provided relate to both the investigation phase and, subject to a ECB Governing Council decision, a potential digital euro ‘realisation’ phase.
The five consultancies’ framework agreements – which do not entail a definite financial commitment by the ECB towards any specific contractor – run for four years in duration, with a maximum of two annual extensions. This means that about 75 per cent of each firm’s (minimum) contract length sits beyond the ECB’s decision-time (in 2023) – so, during a (potential) realisation phase, which could last ‘around three years’, according to a recently published ‘Progress on the investigation phase of a digital euro’ update.
The maximum spend is €20m across all contracts (so, €4m per consultancy if work were to end up being evenly diced).
The award notice specifies that the quintet of companies ‘concluded’ (signed) their contracts with the ECB on dates between 20 October 2022 and 26 October 2022. The notice itself was ‘dispatched’ (sent from the ECB to the Official Journal of the EU) on 21 November. All five company names are listed with the German-language GmbH (‘Gesellschaft mit beschränkter Haftung’ – limited-liability company) abbreviation.
The consultancies are not expected to work simultaneously on the same tasks. Specific contracts will be concluded with the company offering the best value for money on a specific task. Global Government Fintech understands that some of the five consultancies are already out of the starting blocks on specific assignments.
The original procurement notice stated that the ECB envisaged inviting 10 candidates to tender and offering five framework contracts. Nine tenders in total were considered, according to the award notice.
Digital euro work intensifying
The appointment of Accenture, Bearing Point, Deloitte Consulting, Oliver Wyman and Roland Berger is the latest ECB engagement of private-sector support surrounding its digital euro explorations.
Global Government Fintech reported almost three months ago that the ECB had picked five companies (from 54 applications) to prototype digital euro user interfaces. The companies are: CaixaBank, which is concentrating on peer-to-peer online payments; Worldline, which is looking at peer-to-peer offline payments; the EPI (European Payments Initiative) company, which is examining point-of-sale payments initiated by the payer; Nexi, which is exploring point-of-sale payments initiated by the payee; and Amazon, which is focusing on e-commerce payments. These five companies are not being remunerated for their efforts and the ECB has said there are no plans to re-use the prototypes in subsequent digital euro project phases.
Members of the European Parliament (MEPs) have queried the selection of Amazon, expressing concerns including the company’s US roots and market dominance. In an appearance before a parliamentary committee on 29 September ECB executive board member Fabio Panetta mounted a sustained defence of the process and purpose of appointing the company, saying that the ECB was solely focused on learning about technological solutions and was not “making any deal on future co-operation”.
The ECB last week (7 December) published documents about the digital euro prototyping exercise, alongside a letter from Panetta to Irene Tinagli, chair of the EP’s committee on economic and monetary affairs, intended to ‘promote transparency and in a spirit of co-operation’.
In parallel to its work with the five companies, the ECB is also working with the central banks of Austria, Belgium, Finland, France, Germany, Italy, Portugal and Spain (all eurozone states) on ‘back-end’ prototyping.
Digital euro rulebook manager hired
In a separate development, the ECB has appointed Christian Schäfer as digital euro rulebook manager.
Previously a long-serving director at Deutsche Bank (in the ECB’s home city of Frankfurt), he will co-ordinate, manage and facilitate the drafting and development of a digital euro scheme rulebook.
As part of his role he will establish and chair an ECB ‘rulebook development group’ that will consist of representatives from Eurosystem national central banks and market representatives (including consumer representatives). The Eurosystem comprises the ECB and the central banks of the 19 European Union (EU) member states that use the euro.
In the newly created role Schäfer will report to Evelien Witlox, who is approaching the end of her first 12 months as digital euro programme manager. The Dutch national also previously worked in the private sector (as global director of payments at Dutch bank ING).
At the time of the announcement of Witlox’s appointment in November 2021, Global Government Fintech reported that the ECB had about 50 team members working on the digital euro – a number that had grown as CBDC-related work has been stepped up.
DIGITAL EURO: private sector involvement on the rise
Companies now engaged by the ECB =>
* Bearing Point
* Deloitte Consulting
* Oliver Wyman
* Roland Berger
** Caixa Bank
** EPI (European Payments Initiative) company
(* = newly appointed to four-year framework contracts)
(** = non-remunerated involvement)
The ECB is also being informed on CBDC by a ‘Market Advisory Group’ (MAG), which comprises 30 private-sector retail payments specialists. The MAG, whose members are drawn mainly from major European banks but also include retail-sector professionals, is meeting at least quarterly. A representative from the European Commission and representatives from Eurosystem national central banks are also participating.
=>>> Global Government Fintech’s dedicated ‘Digital Currencies’ section <<<=
‘ECB hunts industry expertise to explore programmable digital euro payments’ – our news story (4 November 2022) about the ‘technical talks on programmable digital euro payments’
‘ECB to begin compiling digital euro “rulebook”’ – our news story (5 October 2022) on Fabio Panetta telling the EP’s economic and monetary affairs committee that the authority would ‘soon start work on a rulebook for the digital euro scheme’
‘Five companies picked to prototype digital euro user interfaces’ – our report (16 September 2022) on the ECB appointing the five companies
‘Government payments among three priority use cases for digital euro: ECB’ – our report (7 September 2022) from a half-day event (‘A Digital Euro: Challenges And Opportunities’) featuring the ECB’s digital euro programme manager Evelien Witlox
‘Fifteen recommendations offered for digital euro as ‘investigation phase’ nears half way’ – our news story (24 Aug 2022) on a paper by the Digital Euro Association
‘Digital currency design must be alert to users’ needs: Austrian CBDC paper’ – our news story (16 August 2022) on the ‘What can CBDC designers learn from asking potential users? Results from a survey of Austrian residents’ working paper published by Oesterreichische Nationalbank (OeNB)
‘ECB consults experts over ‘privacy-enhancing’ digital euro tech’ – our news story (20 July 2022) on the ECB inviting external experts to participate in a short series of deliberations on data privacy-related challenges involved in designing a digital euro
‘D€: unanswered questions (and quirks) amid Europe’s CBDC “nitty-gritty”’ – our analysis (20 September 2021) of eurozone central banks’ digital currency explorations
‘Digital euro tech investigations would take two years: ECB’s Panetta’ – our news story (15 April 2021) on a Fabio Panetta appearance before the EP’s economic and monetary affairs committee (on 14 April 2021)