Digital Euro will be free to use, but privacy is up to legislators

While the digital euro will be free to use and accessible to all, it will be up to parliamentarians to decide what personal information banks can access, the European Central Bank said. January 23 statement.

ECB Board member Fabio Panetta said:

In that case, you, the co-legislator, must establish the optimum balance between protecting privacy and achieving other important objectives of a public nature.

Executives mentioned important public objectives, including combating money laundering, financing terrorism, and complying with tax evasion and sanctions.

Instead of a direct-to-central-bank model, researchers previously recommended a supervised intermediation approach for the digital euro.

The ECB believes that intermediaries under its supervision are best positioned to identify use cases for conditional payments and other advanced payment services. The ECB could develop its own standalone payment app or allow private banks to integrate digital his euro into the system as intermediaries.

Preliminary phase of digital euro to be completed by 2023

The ECB will start investigating a digital euro in October 2021. By 2023, the ECB hopes to complete the preliminary phase of the digital euro project.

In addition, according to Fabio Panetta, the European Commission will introduce a bill on currency this year. However, as executives said, the apex bank will continue its currency exploration phase throughout the year.

Panetta added:

The digital euro project’s priorities have always been clear. It is about preserving its role as central bank currency in retail payments, while giving users the option to use it where it is currently not possible, such as e-commerce.

Initial testing of the digital euro token EURM is already underway in Spain with a small group of applicants. However, the European Council’s Eurogroup said on Jan. 16 that future digital euros will not be programmable and will automatically convert to traditional assets.