Digital Euro will be free to use, but privacy depends on lawmakers

The Euro Digital will be free to use and accessible to all, but it will be up to lawmakers to decide what personal information the bank will have access to, the European Central Bank said in a statement. Declaration of January 23.

ECB Executive Board member Fabio Panetta said:

It will then be up to you, the co-legislators, to strike the optimal balance between protecting privacy and pursuing other important public objectives.

The executive mentioned important public objectives, such as the fight against money laundering, the financing of terrorism and tax evasion or compliance with sanctions.

Rather than a direct central bank model, previous researchers recommended a supervised intermediary approach for the digital euro.

The ECB believes that supervised intermediaries are in the best position to identify use cases for conditional payments and other prepayment services. The ECB could develop its own standalone payment application or allow private banks to incorporate the digital euro into their systems as intermediaries.

Completion of the preliminary phase of the digital euro by 2023

The ECB began studying the digital euro in October 2021. By 2023, the ECB expects to complete the preliminary phase of the digital euro project.

In addition, the European Commission will present its legislative proposal on the currency this year, according to Fabio Panetta. However, as the executive stated, the main bank would continue the research phase of the coin throughout the year.

Panette added:

The priority of the digital euro project has always been clear: to preserve the role of central bank-issued money in retail payments while giving users the option to use it even where this is not possible today, as in electronic commerce.

The initial test of the EURM digital euro token is now on going in Spain with a small group of applicants. However, the Eurogroup of the European Council saying on January 16 that digital euro futures will not be programmable and will automatically become traditional assets.

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