On 23 January, Fabio Panetta, Member of the Executive Board of the European Central Bank (ECB) and Chair of the Task Force on the Digital Currency, held an exchange of views on the digital euro before the European Parliament’s Committee of Economic and Monetary Affairs (ECON).
Balance between privacy and AML/CFT
Mr Panetta stated that it will remain under the co-legislators remit to decide on the balance between privacy and AML/CFT issues, preventing tax evasion or guaranteeing sanctions compliance. Moreover, the ECB will propose not to have access to personal data. Notably, he outlined that the ECB has worked on solutions that would preserve privacy by default and by design, thereby giving users control of their payment data. To this end, the ECB is engaging with the European Data Protection Supervisor and the European Data Protection Board. After being asked by MEP Gilles Boyer (S&D, France) on the development of a trustful currency while finding the balance between privacy and AML/CFT concerns, Mr Panetta advocated for a risk-based approach that sets transaction value limits.
Universal accessibility and usability
On another note, he pointed out that the ECB is conducting market research to gather input from experts on the technology underpinning the digital euro, such as blockchain. Mr Panetta outlined that, although all options are on the table, the blockchain technology would not be effective for large amounts of transactions, as should be the case for the digital euro.
Mr Panetta highlighted that all citizens and firms should be able to access and use the digital euro without barriers, regardless of their intermediary. Besides, the ECB is designing online and offline functionalities that will allow the digital currency to fit in different use cases and provide users with different benefits. As an instance, the offline functionality shall endow payment with a similar level of privacy to that of cash.
Timeline
Finally, regarding the timeline, Mr Panetta pointed out that the ECB will finish its investigation phase in the autumn, after which the ECB Governing Council will decide whether to move to the realization phase. As a reminder, this stage does not mean launching the digital euro, it is rather a phase where the ECB develops and tests technical solutions and business arrangements necessary to provide and distribute the digital currency. The decision to issue the digital euro will be taken after the EU institutions adopt a legislative act, for which the European Commissionintends to present its proposal on 24 May (tbc).
Further information: SPEECH The digital euro: our money wherever, whenever we need it
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