The European Central Bank (ECB) has entered into a framework agreement with Feedzai, the top-ranked tenderer, to develop the central fraud detection and prevention mechanism for the digital euro.

This agreement, focusing on risk and fraud management, is valued at an estimated EUR 79.1 million with a maximum value of EUR 237.3 million. In collaboration with PxC, Feedzai will implement a robust central fraud prevention system that adheres to EU security, privacy, and data protection regulations.

A secure digital currency

Feedzai operates as an AI-driven financial crime prevention platform designed to protect individuals and payments from fraudulent activities. The company’s role is to enhance payment service providers’ (PSPs) risk management by providing insights through a central infrastructure-level view of transactions. For each transaction, Feedzai will supply a fraud risk score that PSPs can use alongside their own controls to decide whether to approve or decline a payment.

The ECB emphasizes that the digital euro is intended as a public good, a central bank-backed currency equivalent to physical cash but tailored for today’s digital environment. This initiative aims to maintain the role of central bank money in an increasingly digitized world, decrease reliance on non-EU payment providers, and bolster Europe’s strategic autonomy and financial inclusion.

Privacy is crucial in this endeavor; hence, the ECB has stated that the digital euro will incorporate strong safeguards such as pseudonymization and encryption. The currency is also expected to support offline transactions for small amounts, mimicking cash payments. By doing so, the central bank hopes the digital euro will contribute to Europe’s resilience, inclusion, and technological sovereignty, meeting the needs of citizens and businesses in the euro area.