- Fabio Panetta reveals that the EU needs to prioritize the acceptance of a digital euro in physical stores.
- He says the group aims to maintain high privacy standards to maintain users’ trust.
- As per Christine Lagarde’s statement last year, a digital euro can roll out in 2025.
Fabio Panetta, a member of the ECB’s executive board, disclosed findings from the workgroup currently researching the prospect of a digital Euro. Highlights of Panetta’s speech included use cases and privacy policies.
The EU, through the ECB, has been exploring the prospect of developing a digital Euro since October of last year. With a digital euro, the ECB hopes to meet the payment needs of Europeans today and in the future.
On Wednesday, in Brussels, Fabio Panetta speaking with members of the Committee on Economic and Monetary Affairs of the European Parliament, Panetta revealed the initial findings from the group tasked to look into the prospects of a digital euro in October. Panetta informed that the research goal was to maintain the relevance of a central bank-issued currency in the rapidly digitizing world.
Some of the findings from the workgroup indicated that people would prefer a digital currency accepted anywhere in Europe, offering contactless peer-to-peer applications, not restricted by the platforms of the sender or the recipient.
Panetta stressed that the most important use case for the digital euro was in physical stores from their findings. Panetta’s speech read, “Physical stores are the most important market segment for digital payments, accounting for more than 40 billion transactions in the euro area in 2019.” He went on to add, “E-commerce payments are less numerous but are expected to continue to grow rapidly in the coming years.”
Panetta disclosed that use cases could also extend to stimulus packages, welfare payments, and tax payments. He noted that use cases would continue to evolve with the trends and that legislators had an important part to play in the success of the digital currency, saying payments can be made easier by “giving it legal tender status.”
The big debate around CBDCs is the overwhelming control it gives governments over citizens’ financial data. The idea that governments can monitor the transactions of their citizens could be a deal-breaker and present a case for decentralized cryptocurrency.
However, in his speech, Panetta revealed that while complete anonymity was not possible due to money laundering and terrorism funding concerns, the ECB aims to provide privacy on a level similar to cash and better than other private platforms, collecting data only necessary for operations. His speech read, “a digital euro would provide people with a level of privacy equal to or higher than that of private digital solutions.”
How all of these would play out is yet to be seen. Three weeks ago, ECB chair Christine Lagarde said the EU needed to increase its pace in developing a digital euro. Last year she revealed that the public can expect it to launch in 2025.