COTI, a privacy-focused layer-2 protocol built on Ethereum, has been selected as an early partner in the European Central Bank’s (ECB) digital euro initiative.
The announcement via a blog post on Monday, May 5, marks a major milestone for COTI, which previously contributed to the Bank of Israel’s digital shekel pilot. This latest collaboration signals COTI’s growing prominence in the evolving landscape of central bank digital currencies (CBDCs).
As part of its role in the digital euro project, COTI will contribute its advanced privacy-enhancing technology to enable “conditional payments”—a mechanism designed to verify asset provenance before transactions are executed. According to the ECB, this functionality is critical to maintaining transaction integrity while preserving user confidentiality.
To support this, COTI’s solution leverages Soda Labs’ Garbled Circuits to create an on-chain privacy framework that ensures confidentiality throughout every transaction stage. Reflecting on the partnership, COTI co-founder and CEO Shahaf Bar-Geffen described the invitation as a “testament to the expertise and hard work” of the team, underscoring that privacy is fast becoming a foundational element of the Web3 ecosystem.
Additionally, the ECB plans to launch the digital euro by 2026. In preparation, it has enlisted partners like COTI to help demonstrate how the currency can integrate into everyday retail payment systems. COTI’s privacy infrastructure will be central to testing the conditional payment system, offering eurozone residents transparency and data protection in digital transactions.
Despite this progress, the ECB faces notable challenges in generating public interest in a digital euro. A recent ECB working paper based on a survey of approximately 19,000 people across 11 euro-area countries revealed a general indifference among European households. Respondents were asked how they would allocate a hypothetical €10,000, and only a small portion was designated to the digital euro, suggesting limited disruption to traditional holdings like cash or savings accounts.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
