in

CBDC: European Central Bank Board Member Advocates for the Issuance of a Digital Euro

European Central Bank (ECB) Executive Board Member Fabio Panetta recently delivered a speech advocating for the issuance of a central bank digital currency (CBDC), specifically a digital Euro. The EU, along with many other jurisdictions worldwide, is currently examining the potential benefits and drawbacks of introducing a CBDC. One of the main concerns raised by interested parties is the risk of privacy violations and increased control by central governments. China, which has been testing a digital yuan, has expressed its interest in using a CBDC to influence policy decisions.

Panetta believes that the EU can successfully introduce a digital Euro while addressing these privacy concerns. He outlines four prerequisites for a CBDC: maintaining legal tender status, ensuring privacy by preventing the exposure of users’ personal information, allowing for free usage, and providing tools to maintain the balance between private money and central bank money.

Panetta asserts that the ECB is confident it can maintain this balance. He also criticizes stablecoins, such as PayPal’s recent announcement of its digital dollar (PYPL), suggesting that they serve only the company’s goal of gaining market share. In contrast, a digital Euro would be distributed by banks and payment service providers, who would maintain their relationships with customers. The ECB is actively collaborating with European payment service providers and other stakeholders to ensure that the digital Euro is compatible with existing payment tools and appealing to all users. Additionally, the proposed design of the digital Euro would guarantee the highest level of privacy for digital payments.

Panetta envisions a digital Euro as being “money fit for the digital age.” While he appears confident that government authorities will not abuse their power in issuing a digital Euro, the general population may not share the same level of confidence. Numerous examples of central authorities deviating from their stated mission have demonstrated that they do not always make the right decisions.

Simultaneously, private issuers of stablecoins, essentially modern versions of existing, privately operated payment systems, may offer more private and secure options for physical fiat if they are mandated by law to not retain certain data points.

The ECB is in the final stages of its previously announced CBDC review, with the investigation phase expected to conclude next month and a report to be released thereafter.

Follow crowdfundingmagazine on Instagram: @crowdfundingmagazine_it

What do you think?

363 Points
Upvote Downvote

Written by editorial

Leave a Reply

Your email address will not be published. Required fields are marked *

OneID raises £1M to enhance accessibility of digital identification in the UK

Digital Assets: Research Analyst Predicts Asia and Europe to Gain Dominance in Crypto Market Amid Regulatory Uncertainty in the US