The purpose of the digital euro is preserve the role of central bank money in retail paymentsextending the payment options beyond those offered by cash: this is what was declared by Fabio Panetta, Member of the Executive Board of the European Central Bank (ECB), before the Committee for Economic and Monetary Affairs of the European Parliament
Panetta said he was satisfied with the progress made in research and development of the European CBDC:
“The ECB is at the forefront of major central banks in the design of digital payment solutions for both retail and wholesale transactions.”
Access to the digital euro will initially be open to consumers, businesses, traders and public administrations residing in the euro area, and later extended to individuals and businesses in the European Economic Area. Eventually it will also be expanded to “selected third countries,” based on agreements with specific jurisdictions.
Read also: EU finance ministers issue a statement on the political aspects of the digital euro
“The digital euro should be easily accessible and usable throughout the eurozone, on a par with cash,” explained Panetta. To achieve this goal, the ECB plans to define a uniform set of rules, practices and standards for the digital euro, which would allow intermediaries to easily develop products and services based on the European Union’s CBDC.
However, Panetta underlined that the digital euro will not be a programmable currency:
“But let me be clear: the digital euro will not be a programmable currency. The ECB will not set any restrictions on where, when or who citizens can pay with the digital euro. If we did, we would be offering a voucher. And the banks power plants issue money, not vouchers.”
Furthermore, the ECB has guaranteed that it will not exploit the digital euro to access users’ personal data:
“As far as we are concerned, our proposal will be that the central bank does not have access to any personal data of users.
From a more general point of view, it will then be up to you, the co-legislators, to establish the optimal balance between the protection of privacy and the achievement of other important objectives of a public nature, such as the fight against money laundering, the financing of terrorism and tax evasion or compliance with any sanctions.”
The ECB is also considering it development of a special app “which would only include basic payment functionality,“ to ensure that the CBDC is always available and usable to pay in similar ways throughout the euro area. As for the hardware, users will be able to use the digital euro with smartphones, physical cards or other similar devices, such as smartwatches.
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