Governance and data protection

the programmability of the entire payment process (payment initiation system and infrastructure) needs to be expanded, for example through the use of DLT. This would create a more flexible automation of payment processes, in other words a more individualised design of payment modalities including payment settlement standards. Aspects such as reliability, finality and complete transparency through documentation would be safeguarded through the direct link of the digital payment with the business transaction. Furthermore, the new standards thus created would significantly improve the quality and reliability of business and payment transactions and generate efficiency gains in the processes of users due to the higher degree of automation.

We are currently still in the early stages of development regarding conceivable applications. The following examples nonetheless give an idea of the huge potential of the expanded programmability of payment processes. It is therefore our main concern that the digital euro is designed to support this important functionality.

- Condition and performance-dependent automated (micro)payments between machines (machine-to-machine, M2M) or physical objects (internet-of-things, IoT)

- Bidirectional settlement of receivables between business partners

- Integrated automated payments in autonomous supply chains

- A direct fulfilment of service with the corresponding payment between business partners (delivery-vs-payment, DvP).

Governance and data protection

Digital central bank money and digital commercial bank money enable a highly automated payment system not only between citizens but also between enterprises or public sector organisations. In order to create trust, acceptance and legal certainty, a digital currency should always be issued by a regulated entity.

At the same time, the payments system needs a uniform or interoperable infrastructure in order to make transactions secure and traceable. Proof of identity plays a key role here. Alongside the natural identities of citizens, the infrastructure in question should also enable the provision of identities for legal entities, machines or other entities. It should be possible to integrate identities into existing payment systems as seamlessly as possible. While maximum privacy is paramount for citizens, the needs of the commercial sector are different. Despite these divergent needs, both areas must be interoperable.

For legal entities, on the other hand, the most important aspects are the legally compliant documentation of a transaction and the participating parties and a proof of payment. At the same time, the resulting data on all the transactions made and the resulting metadata are highly sensitive information as they provide a detailed picture of business activities and business relations. In order to technically rule out data misuse it must be ensured that the regulated entity that issues the money and any intermediaries do not comprehensively store information on transactions and identities. The data that needs to be collected for legal reasons must be adequately protected.

It should also be possible to use the digital euro with digital identities provided by the state. Restricting use to only commercial providers would limit the range of possible uses and create a dependency on a third, commercial instance. A publicly provided identity infrastructure should enable legal entities that