Web3 privacy protocol COTI teams up with European Central Bank on digital euro

Blockchain-focused privacy protocol COTI will collaborate with the ECB to implement its privacy technology for the upcoming digital euro.

COTI, a privacy-centric layer-2 solution on Ethereum , has been selected as one of the pioneer partners in the European Central Bank’s project to develop the digital euro . In a Monday blog announcement , COTI said its involvement comes after its success in the Bank of Israel’s digital shekel project, highlighting its growing role in central bank digital currency solutions.

As part of the ECB’s project, COTI will contribute its privacy-focused technology to support “conditional payments,” a system that ensures asset provenance is verified before transactions take place, the project explained in the announcement.

COTI’s solution, based on Soda Labs’ Garbled Circuits, will offer an on-chain approach to privacy that maintains confidentiality throughout the transaction process. Shahaf Bar-Geffen, COTI co-founder and CEO, says the invitation to join the ECB marks a “testament to the expertise and hard work of the COTI team” as privacy has become a “vital component for the future of web3.” Amid the news, COTI’s native token ( COTI ) jumped 6% to $0.07785.

The ECB aims to launch the digital euro by 2026, with selected partners working to demonstrate how the new currency can integrate into retail payment systems. COTI’s technology will be used to test the implementation of the conditional payment system, which is expected to provide more transparent and private transactions for all eurozone residents.

In late April, a senior French central banker cautioned that U.S. policy shifts supporting stablecoins could undermine European monetary sovereignty without a digital euro.

As crypto.news reported earlier, Denis Beau, first deputy governor of the Banque de France, highlighted that the recent executive order from the Donald Trump administration promoting dollar-backed stablecoins could have “concrete adverse consequences” for Europe’s financial sovereignty and urged swift progress on the digital euro.