FRANKFURT – The digital version of the euro currency will be free to use and accessible to everyone, but the European Central Bank does not want to keep personal data of its users, ECB board member Fabio Panetta said Monday.
The ECB is working on a digital version of its currency and is in the process of outlining the broader design, also hoping to ease concerns that the digital currency could disrupt the financial system and give the central bank too much data on citizens.
Digital currency is a direct claim on the central bank’s balance sheet, similar to cash, so it is considered safer than a deposit held in a commercial bank.
“The digital euro would be a public good,” Panetta told the European Parliament’s economic and monetary affairs committee.
“Therefore, it would make sense for its core services to be free – for example, when using the digital euro to pay another person, as is the case with cash.”
Banks are concerned that digital currency will make their own services redundant, so customers will abandon them and move their money to central bank money, given the added safety.
However, Panetta said ECB it will not offer accounts to citizens and will not allow people to make programmed, regular payments to cover transactions such as bills or rent, as it is not in the business of creating competition for commercial banks.
“We believe that regulated intermediaries that are in direct contact with consumers are in the best position to identify use cases for contingent payments and any other advanced payment services,” Panetta said.
If issued, ECB could develop its own stand-alone payments application or could allow commercial banks to integrate the digital euro into their own platforms.
However, its own app will only include basic payment functions and will ensure it can be used anywhere in the eurozone, a currency bloc of 20 nations with around 350 million people.
“The ECB I will not place any restrictions on where, when or to whom people can pay with digital euro,” Panetta said.
Hoping to address a key concern about privacy and confidentiality, Panetta said ECB aims to have no access to personal data.
However, that could be problematic given concerns about money laundering, terrorist financing and tax evasion, so lawmakers are looking at options to track usage.
The ECB is still only exploring the creation of a digital euro and the actual issuance is still years away.