European Central Bank (ECB) executive board member Piero Cipollone addressed the European Parliament Committee on Economic and Monetary Affairs regarding the preparations for the issuance of a digital euro.
He outlined four key issues confronting the central bank and outlined how the ECB would ensure the public’s access to a freely available common means of payment.
Cipollone stated that the ECB had initiated the search for infrastructure providers for the European Central Bank digital currency (CBDC).
He stressed the importance of this proactive approach, stating, “Our readiness would be compromised if we started searching for possible suppliers only after that decision [to launch the digital euro] is made.”
Additionally, he highlighted that agreements would remain adaptable to legislative and technological advancements.
Moreover, Cipollone clarified that only legal entities with registered offices in the EU and controlled by EU nationals would be eligible for participation in the procurement process, potentially impacting Amazon’s involvement in the project.
Regarding the digital euro rulebook, Cipollone advocated for a unified framework encompassing rules, standards, and procedures to ensure harmonious implementation.
He emphasised that the digital euro should function similarly to cash, liberating users from reliance on international payment processors and ensuring uniform service across the eurozone.
Cipollone likened the digital euro infrastructure to railway tracks, accessible to various private entities while remaining state-owned.
However, concerns were raised by the European Money and Financial Forum regarding the legal implications of designating the digital euro as legal tender, citing issues surrounding the status of integrated private payment providers.
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To maintain financial stability, safeguards are being integrated into the digital euro design, ensuring it remains interest-free to avoid competing with savings institutions.
Restrictions will be placed on public digital euro holdings, with businesses and financial institutions barred from holding it directly. Instead, a mechanism will be established to link CBDC wallets with bank accounts, facilitating transactions without pre-funding the wallets.
Finally, addressing privacy concerns, Cipollone assured that the digital euro would offer high standards of privacy for online payments, surpassing current commercial solutions.
Offline transactions would mirror the privacy of cash, with only the payer and payee possessing transaction details.
Online transactions would provide minimal pseudonymised data to the ECB for settlement purposes, with users retaining greater control over their information compared to private payment systems.
Additionally, the digital euro would boast state-of-the-art cybersecurity measures.
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