ECB executive board member Fabio Panetta highlights the benefits of the digital euro in preventing private payment service monopolies and preserving monetary sovereignty in Europe.
The European Central Bank (ECB) is expressing its support for the European Commission's legislative proposals regarding the digital euro. ECB executive board member Fabio Panetta praised the proposals during a speech to the European Parliament's Committee on Economic and Monetary Affairs on September 4. Panetta emphasized that these proposals position Europe as a leader in central bank digital currency (CBDC) development and offer a solution to potential issues related to private dominance in the financial sector.
Panetta, a noted critic of cryptocurrencies, described the EC's digital euro proposals as a He highlighted the importance of ensuring that Europeans always have access to a public payment option, whether in cash or digital form, particularly as private payment services with closed-loop solutions become more prevalent.
The key elements of the EC's proposals include granting the digital euro legal tender status and making its acceptance for payment mandatory. Additionally, Panetta commended the EC's privacy measures for the digital euro, stating that the Eurosystem would not have access to users' personal details or be able to connect payment information to individuals. Intermediaries would only have access to user information required for onboarding and regulatory compliance.
Panetta also emphasized the offline payment capability of the digital euro, which provides privacy similar to using cash, as neither intermediaries nor the central bank would process the payment.
The proposals further include reasonable pricing policies and mechanisms for the ECB to maintain equilibrium in the financial system. Panetta highlighted that the issuance of a digital euro represents an opportunity for the European financial sector rather than a risk.
Panetta warned of the risks associated with private payment service providers seeking market dominance without incentives to restrict their services or make them compatible with other offerings. The digital euro, in contrast, offers a platform for innovation with pan-European reach while ensuring the orderly adjustment of the financial sector.
Overall, the ECB views the digital euro as a means to prevent private payment service monopolies and safeguard Europe's monetary sovereignty, addressing concerns about the potential impact of private solutions on the economy.
(DEREK ANDERSEN, CoinTelegraph, 2023)