Reflection on the digital euro is progressing within the European Central Bank. LLaunched at the end of 2019 to offer a centralized alternative to cryptocurrencies, given the notoriety of some of them, the e-euro project has yet to find its use. Wholesale currency for amount transactions? Retail currency? Programmable currency to automate certain financial services? The ECB seems to have finally decided: the future digital euro will never be a “ programmable currency “, limited in its uses, said Monday a senior official of the European Central Bank (ECB).
“Let’s be clear: the digital euro will never be a programmable currency”underlined Fabio Panetta, member of the Executive Board of the ECB, before the Committee on Economic and Monetary Affairs of the European Parliament.
Otherwise it would be equivalent “to issue a bond (…) and central banks issue money, not bonds”he hammered.
In other words, the ECB does not want to impose restrictions on how this digital euro can be spent, whether it is the nature of the purchases, where or when to make them.
It is actually a reversal on one of the tracks launched. In 2020, the institution announced that it was studying the possibility of issuing for European citizens a currency programmable as ” tokens » (token) opening financial rights. The ECB is therefore now aiming for mass adoption present in the daily lives of citizens.
However, the road is still long. While states, led by China with the e-yuan, have already launched a central bank digital currency (MNBC), the actual launch in the European Union should not take place before 2025.
Exchanges operated by banks
Also, the ECB would like the digital euro to be inclusive, which is why it is working on a “new digital app” simple to use for payments made through banking intermediaries, explained Mr. Panetta. Faced with the digital euro, the crypto-assets exchanged via the blockchain promise them decentralization or, like bitcoin, a number limited to 21 million tokens in order to avoid the collateral effects of printing money.
“No matter where you travel in the euro zone, the digital euro will always be recognised” et “you can pay with”described Fabio Panetta.
The first versions of the application “should offer contactless payments or QR codes”, according to Mr. Panetta. The media may be smartphones, payment cards and other smart watches.
As technology evolves, “other forms of payment may become available in the future” by being offered by supervised intermediaries “, he said.
intermediaries who communicate with each other
These will be “best placed to identify use cases for conditional payments and any other advanced payment service” also being able to integrate the digital euro into their own platforms, he noted.
For the States as for the EU, it is a question of keeping control over monetary power, an issue that is all the more important in the face of the high inflation that it has been trying to control since the Covid crisis. The emergence of central bank electronic money would also allow the European level to ” have a powerful lever for asserting our sovereignty in the face of private initiatives such as Libra” (the Facebook project finally abandoned by the firm under pressure from regulators Ed)pleaded in 2020 last François Villeroy de Galhau, the governor of the Banque de France.
The United States also wishes to maintain its global monetary leadership with an e-dollar project, in conjunction with the American Federal Reserve.
For its part, the Governing Council of the ECB will decide in the autumn whether or not to move on to the pilot phase of the creation of the digital euro. The possible decision of the ECB whether or not to issue a digital euro will be taken later, once the Parliament and the Council of the EU have adopted its legislative framework.
(With AFP)