ECB Board Member Details Plans and Privacy Measures for the Launch of Digital Euro
Summary:
European Central Bank (ECB) board member, Piero Cipollone spoke to the European Parliament Committee about the launching of the digital euro. It was revealed that ECB is searching for infrastructure providers, and only entities registered within EU or controlled by EU nationals would be eligible for the procurement process. Cipollone discussed the creation of a standard set of rules for digital euro, emphasised its cash-like functionality, and explained the financial stability measures for its design. The digital euro's privacy standards were also assured to be high, with transaction details known only to the payer and payee.
Board Member of the European Central Bank (ECB), Piero Cipollone, recently conversed with the European Parliament Committee overseeing Economic and Monetary Affairs regarding the initiation of a digital euro. He elaborated on four primary concerns of the central bank and described the ECB's approach to ensuring the population's access to a freely available common mode of payment. Cipollone stated that the ECB has started hunting for suitable infrastructure providers for the ECB’s digital currency scheme. He mentioned the necessity of flexible agreements according to legal and technical developments, and the participation criteria in the procurement process of being legal entities with EU registration and control. This could pose a challenge for Amazon who was initially pegged to develop a prototype e-commerce component for the digital currency, but further call for new applications has been made since.
Following this, Cipollone discussed a common rulebook for the digital Euro implementation. He asserted that the digital euro should provide a cash-like experience, liberating users from relying on international payment operators, and ensuring consistent service throughout the Euro region. Cipollone compared the digital euro infrastructure to actual train tracks; property of the state but usable by various private firms.
In response to this, the independent, nonprofit European Money and Financial Forum pointed out potential legal issues arising from the digital Euro adoption as legal tender, especially concerning private payment providers integrated into the Euro system. Cipollone subsequently expanded on the stability measures introduced into the digital euro design, insisting on its interest-free nature and restrictions on its possession by businesses and financial organizations. A possible solution to facilitate transactions without topping up wallets with pre-funds was implied by linking CBDC wallets to bank accounts. Lastly, Cipollone reassured that privacy would be a priority in the digital euro system, enabling less revealing online payments in comparison to existing commercial solutions, as well as robust cybersecurity measures.
Published At
2/16/2024 11:00:00 PM
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