On Sept. 4, Fabio Panetta, ECB Executive Board member at the Committee on Economic and Monetary Affairs of the European Parliament, said the central bank was nearing the end of its research and investigation phase.
It will soon decide whether to move to the next phase of potentially developing and issuing a digital Euro.
The ECB first published a report on a CBDC in October 2020, and three years later, they’re ready to move forward.
Big Tech Warning
The first key aspect is legal tender status, he said before adding that this would give people the right to have access to and pay with the digital Euro.
Panetta pushed availability and accessibility across the Eurozone, saying that the CBDC should be as accessible as “electricity and water.”
The second major part is a new payment solution based on the CBDC. It would have “enhanced privacy and data protection,” according to Panetta, who didn’t elaborate. Risks related to money laundering and terrorism financing would be minimized, he added.
However, there was a warning about big tech and a shot across the bow for PayPal, which has recently launched its own dollar-pegged stablecoin.
“We should not leave it to the private sector alone, including big techs, to provide such services,” he said.
“Private providers of payment services, including PayPal, have no incentive to limit the take-up of their stablecoins or the range of services they provide. Quite the opposite: their objective is to expand their customer base and gain market share.”
He warned about firms such as PayPal generating revenue and creating monopolies, but this is exactly what banks do.
Centralized Currency Control
Centralized private companies would also retain full control over their stablecoins.
Nevertheless, the control a central bank maintains over what is essentially programmable money would be even greater, but that was also not mentioned by the ECB executive.
Addressing the European Parliament, Panetta concluded that the digital Euro will give the bloc a “digital means of payment that, like cash, unites us because it can be used by everyone, everywhere.”
“It is also an opportunity for Europe to lead the international debate on central bank digital currency, with a strong focus on privacy and preserving monetary sovereignty in the digital age.”