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EuroTz

What is a CBDC?

Central Bank Digital Currency (CBDC ) is a digital form of fiat money, likely to be implemented on a distributed ledger to better control the issuance, flows, and ownership of the digital currency. CBDCs are not yet a standardized term and no rule-making, however, we can recognize some characteristics:
  • Central bank-issued digital money and a liability¹ of the central bank
  • Backed by the government in the same way that current forms of fiat currency are backed
  • Distinct from existing accounts at Federal Reserve Banks
[1]: Liabilities are what the bank owes to others. Specifically, the bank owes any deposits made in the bank to those who have made them. The net worth or equity of the bank is the total assets minus total liabilities. (The full article).

What is EuroTz?

Started in February 2020, EuroTz is a Proof of Concept proposal to build a collateralized Euro stable coin on the Tezos Blockchain.
  • It is a token that can be used on the Tezos public Blockchain or
    on a Tezos private Blockchain;
  • It is backed 1:1 by euro fiat deposits made in reputable banks ²;
  • It is auditable in real time (the 1:1 backing is verifiable in
    real time);
  • It can be emitted by a duly licensed and regulated financial
    institution based in the EU.
[2]: For each coin issued on the blockchain, one equivalent monetary unit, also known as fiat (EURO, USD, GBP, etc) is escrowed.

What are the functionalities and purposes of EuroTz?

  • First, it creates a Euro backed digital currency(100% covered by
    euro deposits in a hive-off account via PSD2 standard) that can
    ease interbank exchanges and consequently exchanges between
    consumers.
  • On top of this stable coin can be built a software ecosystem
    allowing to tokenize OTC derivatives (bonds, options, structured
    products...);
  • It offers a secure mechanism of Delivery versus Payment(DvP) to
    ensure a well unwound of digital assets trading.
  • One of the most innovative aspects is the possibility for a
    digital asset owner to swap its asset for another one, while
    downplaying fees and securing the swap.

What is Delivery versus Payment (DvP)?

Delivery versus payment is a mechanism that links a securities transfer and a fund transfer in such a way as to ensure that delivery of securities occurs only if payment of funds occurs,
  • It provides compliant, atomic and flexible transactional features
    with no intermediaries;
  • It can automatically handle reporting and regulatory requirements
    and all the post-deal lifecycle steps;
  • It is traceable and fully supports AML and KYC can provide market
    data to products requiring them and connectivity to secondary
    markets supporting heterogeneous products;
Smart contract securities that will be created on the Tezos blockchain can embed this functionality.

How settlement is performed on the blockchain?

First, through a retailer platform, a consumer who wants to buy EuroTz has to connect to his traditional bank account(in euro) via the PSD2 standard and receive the equivalent amount in EuroTz on his Tezos wallet.
However, the consumer doesn't necessarily need to be familiar with the native Tezos address or hold a Tezos account, the transfer management will be managed in the backend by a Feeless transfer/approval contract process.

How is Camunda BPM used to assume compliance?

  • Provide Business Process management/statistics that help to manage
    the euroTz Back-office interaction.
  • Transactions are translated into business workflows
  • At each process step, an administrator can have a global view of
    the current transactions state in real time, so he can perform
    manual verifications on the transactions (KYC / AML, verification
    of sufficient funds of an address. This process offers a
    compliance mechanism to euroTz ).
Camunda BPM (Business Process Manager): an open-source workflow and decision automation platform.

How events are managed on euroTz?

A contract called EventSink is used as an alternative to the events. After each successful transfer or approval, an internal call to the eventSink contract is fired as an event summarizing information relevant to the event.

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