Web3 privacy protocol COTI has been chosen by the European Central Bank (ECB) to help bring privacy-enhancing technology to the much-anticipated digital euro.
In a blog post on Monday, COTI announced its official participation in the ECB’s digital currency pilot. The Ethereum-based Layer-2 protocol, known for its strong focus on privacy, will play a key role in developing a “conditional payments” system — a mechanism that ensures transactions can only occur when specific conditions are met, like verifying the origin of funds.
This move builds on COTI’s earlier success supporting Israel’s digital shekel initiative, cementing the protocol’s growing reputation as a go-to privacy solution for central bank digital currencies (CBDCs).
“This is a major milestone,” said Shahaf Bar-Geffen, CEO and co-founder of COTI. “Being selected by the ECB validates our team’s dedication and shows how important privacy is in shaping the future of Web3 and digital finance.”
How COTI’s Technology Works
COTI will deploy its Garbled Circuits-based privacy tech, developed by Soda Labs, to ensure sensitive transaction data remains confidential on-chain. The system will be tested as part of the ECB’s efforts to integrate the digital euro into everyday payment systems across Europe.
The collaboration comes at a time when privacy and transparency are hot topics in the world of digital currencies — especially as central banks work to strike the right balance between control and user protection.
Digital Euro Targeted for 2026
The ECB plans to roll out the digital euro by 2026, and partners like COTI are now helping build and test the infrastructure. The digital euro is expected to support faster, safer, and more private transactions across the eurozone.
Why It Matters for Europe
This development also comes amid growing geopolitical competition. In recent weeks, France’s central bank warned that the U.S.’s pro-stablecoin policies, especially under the Trump administration, could pose a risk to Europe’s monetary independence. A strong digital euro — built with privacy in mind — could help Europe stay competitive and sovereign in the evolving global digital economy.
Amid the news, COTI’s token (COTI) jumped nearly 6%, now trading around $0.07785.
