ECB Executive Board member in charge of the digital euro project, Fabio Panetta, responded to MEPs’ requests for clarification on Monday 23 January on the creation of a digital central bank currency for the euro area, as the Eurogroup recently reaffirmed its support for this project which is supposed to strengthen the strategic autonomy of the euro area (see EUROPE 13100/4).
To Stefan Berger (EPP, German) and Michiel Hoogeveen (ECR, Dutch), who questioned the real demand of the public and economic operators for a digital euro, Mr Panetta argued that, in an increasingly dematerialised environment, no developed economy could function without a truly ‘safe asset’. In particular, he considered it necessary to prepare, via a digital euro, for the possible risk that, in the not necessarily distant future, “a digital renminbi” would ‘invade’ the payments market in the euro area.
On privacy, Mr Panetta said that the ECB, which is considering a centralised system allowing one billion daily transactions, does not want to have access to any personal data of users.
Jonás Fernández (S&D, Spanish) and Gilles Boyer (Renew Europe, French) asked about the impact of the digital euro on bank deposits. The ECB does not want to create a payment instrument which, by causing a flight of bank deposits, would fuel financial instability, Mr Panetta said. Nor does it want to enter the retail banking market to compete with European banks through a 100% safe and free instrument. He therefore advocated setting a ceiling on the deposit of money in the digital euro wallet that the ECB will make available in the form of a specific application.
Through Mr Boyer and Danuta Hübner (EPP, Polish), the principle of extraterritoriality was also discussed: will people outside the euro area have access to the digital euro? At first glance, no, according to Mr Panetta, who spoke of international discussions on the interoperability of future digital central bank currencies.
All these issues, and others such as the role of financial banking institutions or conditional payments (e.g. direct debits) that the user will set himself, will have to be answered politically by the European legislator, Mr Panetta stressed, as the European Commission will present its specific legislative proposal next May.
The ECB’s investigation phase will continue until the autumn, when the Governing Council will decide whether or not to enter into the implementation phase of the digital euro project with a view to going live by 2026.
See the ECB’s second progress report on the digital euro: https://aeur.eu/f/513 (Original version in French by Mathieu Bion)