During a session with the European Parliament’s Economic and Monetary Affairs Committee, Piero Cipollone, an Executive Board Member of the European Central Bank (ECB), addressed the preparations for the launch of a digital euro, focusing on four key issues affecting central banks and the ECB's efforts to ensure widespread access to free universal payment methods.
Cipollone emphasized the importance of securing infrastructure providers for the European Central Bank Digital Currency (CBDC) in advance of any decision to launch a digital euro. He stressed the need for proactive action to avoid delays in preparations, highlighting the flexibility of the agreement in response to legislative and technological developments. Additionally, eligibility criteria for participation in the procurement process were outlined, restricting involvement to legal entities based in the EU and controlled by EU nationals.
Regarding the digital euro rulebook, Cipollone emphasized the necessity of establishing a unified framework encompassing rules, standards, and procedures to facilitate its seamless implementation. He underscored the aim for the digital euro to function similarly to cash, providing users with independence from international payment processors and ensuring uniform services across the eurozone. However, concerns raised in a paper by the European Monetary and Financial Forum regarding the legal status of private payment providers integrated into the Eurosystem were acknowledged.
Cipollone addressed the importance of incorporating safeguards into the design of the digital euro to maintain financial stability. Measures such as ensuring the digital euro remains interest-free to prevent competition with savings institutions and imposing limits on public digital euro holdings were highlighted. Moreover, corporate and financial institutions will be prohibited from holding euros directly, with provisions for linking CBDC wallets with bank accounts to enable seamless transactions without requiring pre-funding of the wallet.
Privacy considerations were a significant aspect of Cipollone's discussion, with assurances that the digital euro would offer robust privacy standards. He pledged that digital euro transactions, both online and offline, would afford high levels of privacy, surpassing current offerings by commercial solutions. Notably, offline transactions would mirror the privacy of cash payments, with transaction details confined to the payer and payee. Online transactions would involve minimal pseudonymous data collection by the ECB, with users granted enhanced control over their information compared to private payment systems, along with robust cybersecurity measures.
