The ECB Nears the Next Phase for a Digital Euro
In a recent statement, Fabio Panetta, an ECB Executive Board member, revealed that the central bank is approaching the end of its research phase and will soon decide whether to proceed with the development and issuance of a digital Euro.
The ECB initially published a report on a Central Bank Digital Currency (CBDC) in October 2020, and now, three years later, they are ready to move forward.
Legal Tender Status and Accessibility
Panetta emphasized the importance of granting legal tender status to the digital Euro, ensuring that individuals have the right to access and use it for payments. He also stressed the need for the CBDC to be as accessible as essential utilities like electricity and water.
Furthermore, Panetta mentioned the potential for a new payment solution based on the CBDC, offering enhanced privacy and data protection, with reduced risks related to money laundering and terrorism financing.
Cautionary Words for Big Tech
The ECB executive issued a warning about relying solely on private sector providers, including big tech companies like PayPal, to offer digital payment services. He expressed concerns about their profit-driven motives, which could lead to monopolies and limited services.
Centralized Currency Control
While private companies would retain control over their stablecoins, a central bank’s control over programmable money like a CBDC would be even greater. However, Panetta did not delve into this aspect during his address to the European Parliament.
The Digital Euro’s Potential
According to Panetta, the digital Euro will provide the European Union with a universally accessible means of payment, akin to cash. He also highlighted the opportunity for Europe to lead the global discussion on central bank digital currencies, focusing on privacy and maintaining monetary sovereignty in the digital era.
Hot Take: The Global Interest in CBDCs
While only 11 countries have fully launched a CBDC, the CryptoPotato report indicates that 130 countries are currently researching these digital currencies. This demonstrates the widespread interest and exploration of CBDCs on a global scale.
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