ECB Chooses AI Startup Feedzai to Tackle Fraud in Digital Euro Project

The European Central Bank (ECB) has awarded a major contract to Portuguese artificial intelligence firm Feedzai, working alongside PwC, to develop fraud detection capabilities for its planned digital euro. According to the ECB, the agreement could be worth up to €237.3 million over four years, with an initial estimate of around €79.1 million.

Feedzai will design an AI-powered system that evaluates the fraud risk of digital euro transactions in real time. By comparing each payment against typical user behavior and established patterns, the system will provide risk scores that payment service providers can use to decide whether to approve or reject a transaction. The move reflects the ECB’s determination to embed preventive security measures directly into the design of the central bank digital currency.

The project marks a significant step toward Europe’s goal of establishing a sovereign digital currency. Officials see the digital euro as a way to strengthen monetary independence, reduce reliance on non-European payment networks, and offer consumers a safe alternative to private stablecoins. The ECB is targeting legislative approval for the digital euro by mid-2026, with a possible launch in 2029.

At the same time, the initiative raises important questions about privacy, governance, and technical integration. Processing large volumes of behavioral data may spark debate about how to balance fraud prevention with user confidentiality. Payment service providers will need to adapt their systems to integrate with the new scoring model, and regulators will be watching closely to ensure transparency and accountability.

As the ECB advances its digital euro preparations, the choice to partner with an AI specialist highlights the growing importance of technology in safeguarding future payment systems. Success will depend on whether the model can adapt quickly to new fraud tactics while minimizing false positives that might block legitimate transactions. For Europe’s financial ecosystem, this development underscores both the opportunities and challenges of embedding AI into the very foundations of money.

Source: Reuters