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I believe having commercial banks distributing/intermediating CBDC has been acknowledged as the right model for the digital Euro. On the case for issuing CBDC, there are several reasons for doing that , and among those  it's worth remembering there is a decreasing amount of cash in circulation already in several Countries, with negative impacts on real economies.

The test is definitely interesting, as it builds on top of existing strenghts of the three involved parties, and represent an answer of trusted ecosystems to the competition of Fintechs. However the liquidity settlement "matter" would possibly deserve additional evaluation of different technologies too.

Thanks Ralph very clear and realistic picture. One thought I would add is about the end-users perspective, either consumers or businesses; the risk financial institutions would bring - in order to make money available to the payee before settlement occurs -  might be considered somehow transparent to end users, and as a consequence they could easily embrace - as you say - a "quicker to market" non SEPA-based solution, increasing the risk of a fragmented market and partially incompatible real-time payment ecosystem. The right balancing of EU project schedule, and a bit more inclusion of Instant Payment CSMs models (i.e. which settlement risk is applicable/acceptable ?) in the schema design would possibly help the adoption process here ?

National plans are very much welcome  to avoid fragmented initiatives which leaves stakeholders with uncertainty. More aggressive timeframes would certainly be feasible though, even considering that the legislation framework needs maybe more time to be agreed than the technological one. By the way... Anyone up for an immediate settlement mechanism or bank-to-bank distributed ledgers? 

Cannot agree more with Ovum comment. Discussing innovation cannot be disruptive for banks, we have seen too many failures of the "must change everything" approach. Regulations  are becoming a huge motivation for innovation : the European Sepa experience,  as well as the UK Faster Payment one are  actually showing all their potential. The central point nowadays in undoubtedly to modernize the overall payments underlying infrastructure to be "enabled" to innovate.

Hi Ketharaman

I read your blog with attention , and have now a twofold kind of feeling about it. 

First of all let me say that it is very interesting, rich of references (either pat 1 and 2) and providing a snapshot of what might be the reality in the Financial Banking community...BUT only somewhere...and here we are on the second part of my thoughts..

From what I read though, it does not look like we are discussing Global Transaction Banking here...let's see

Impractical open standards ? it is not all about Payment Service Hubs resolving this issue ? I mean the solution is exactly the reason to transform legacy applications, not its stopping point, isn't it ? 

Low Uptime ? I believe, at 74% uptime (but even close to 80%) no mission critical bank application system can operate at all, not to discuss the CTO maintaining his seats for more then a week...am I wrong ? 

Sudden loss of functionalities ? but are we discussing of GTB or consumer software runnig on android ? 

All in all I believe all the issues described in the blogs - real ones of course - are for sure just confirming the mandatory requirements for Banks to RUSH away from legacy applications TODAY, and move toward a solid Payment Hub without further delays. Thanks and regards

It's very good to receive another sign of committment to mobile payments from EPC. I read the document , with particular focus to utilisation of the SCT product and I have to say I did not find the cases and overall business model particularly well presented. The finality of the payment should be considered more carefully and I think merchants - in order to deliver the goods - will want to know not only that "SCT has been succesfully initiated", but also that "the payment has been accepted and will be cleared asap". Maybe it's just a matter of terminology. Also, could not find references to the "e-operating model" and I wonder what are the status and evolution of such excellent scheme.