ECB: digital euro will have better privacy than private systems
The European Central Bank (ECB) is making strides towards the introduction of a digital euro, a move that promises to revolutionize the financial landscape within the European Union. In a recent address to the European Parliament Committee on Economic and Monetary Affairs, ECB executive board member Piero Cipollone outlined the central bank’s preparations for this digital currency. He emphasized the search for infrastructure providers within the EU, ensuring that the digital euro’s foundation is both robust and compliant with ongoing legislative and technological changes. This approach not only prioritizes EU entities and nationals in the procurement process but also sets the stage for a digital currency that is deeply integrated with the EU’s financial ecosystem.
Cipollone also introduced the concept of a digital euro rulebook—a comprehensive framework designed to ensure a harmonious and standardized implementation across the eurozone. This digital currency aims to replicate the accessibility and reliability of cash, offering an alternative to international payment processors and ensuring uniform service across member states. By drawing an analogy with state-owned train rails used by private companies, Cipollone highlighted the potential for a digital euro infrastructure that supports a variety of services while remaining under state control.
The digital euro is being designed with several safeguards to maintain financial stability and address potential legal concerns. Notably, it will not bear interest, which mitigates the risk of competition with traditional savings institutions. Additionally, measures such as holding limits for the public and restrictions on business and financial institution holdings are being considered. These steps, along with the possibility of linking Central Bank Digital Currency (CBDC) wallets with bank accounts, aim to facilitate seamless transactions without the need for wallet prefunding.
Privacy and cybersecurity are at the forefront of the digital euro’s design. Cipollone assured that online payments would offer unprecedented privacy levels, surpassing those of current commercial solutions. The ECB plans to collect only a minimal set of pseudonymized data for necessary operations like settlement, while providing users with greater control over their information. Furthermore, offline digital euro transactions would offer privacy comparable to cash transactions, known only to the involved parties. This commitment to privacy, coupled with state-of-the-art cybersecurity measures, positions the digital euro as a pioneering GDPR-compliant digital currency.
Source: Digital euro will have better privacy than private systems, ECB exec says
