At a hearing on Monday 17 November before the European Parliament’s Committee on Economic and Monetary Affairs (ECON), Piero Cipollone, member of the Executive Board of the European Central Bank (ECB), sought to reassure MEPs and clarify the most controversial issues surrounding the future digital euro. These include the use of cash, respect for confidentiality and possible destabilisation of the banks’ business model.
“The digital euro will enable [banks] to preserve their business model and improve the payment services they offer. From the outset, we indicated that the digital euro would be distributed by the banks. We have also designed it in such a way as to avoid any banking disintermediation”, said Mr Cipollone.
“With international schemes, banks lose commissions; with ‘Big Tech’ mobile payment solutions, banks lose commissions and data; in the future, with stablecoins, they will lose commissions, data and deposits”, continued the Italian economist.
“With the digital euro, on the other hand, the compensation model ensures that the banks benefit every time a payment currently made via one of these solutions is replaced by a transaction in digital euro. This is because the Eurosystem will not charge scheme or settlement fees”, he added.
EU digital sovereignty. Furthermore, Mr Cipollone argued that there was no competition between public and private solutions in order to ensure that the operation of both digital and physical payments did not depend on decisions taken outside Europe. On the contrary, according to the central banker, the digital euro will provide standards within reach of complementary private European initiatives.
The European Parliament rapporteur, Fernando Navarrete (EPP, Spanish), questioned Mr Cipollone on the advisability, when deciding on the possible issue of a digital euro, of assessing whether the excessive dependence on non-European players had in the meantime been absorbed by the market.
Once again (see EUROPE 13747/21), on the left of the Chamber, Nikos Papandreou (S&D, Greek) fiercely opposed this approach. “We had a private sector solution and we sold it to Visa and MasterCard”, he said, citing several examples. And he added: “The private sector solution: that’s over. Thanks for proving otherwise”.
Mr Cipollone defended a dynamic model based on the future digital euro and on close synergies with the private sector. (Original version in French by Bernard Denuit)