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ECB’s Panetta says digital euro won’t be programmable, not a voucher

digital euro cbdc currency

Flavio Panetta, a director of the European Central Bank (ECB), confirmed that the digital euro will not be programmable money. In other words, the central bank digital currency (CBDC) will not include restrictions on how it can be used. Users can make conditional payments – a payment is only made if an event happens, but that is within the user’s control. Panetta was speaking during a European Parliament presentation today.

Panetta said, “Let me be clear: the digital euro would never be programmable money. The ECB would not set any limitations on where, when or to whom people can pay with a digital euro. That would be tantamount to a voucher. And central banks issue money, not vouchers.” In contrast, other governments such as Singapore and Brazil are exploring programmable money, especially for government-subsidized programs.

Last week the Eurogroup, made up of the Eurozone finance ministers, stated that they don’t want to see a programmable digital euro with any restriction on its usage.

The ECB director also reiterated the need for baked-in privacy for a digital euro, so the central bank doesn’t see detailed transaction data. However, Panetta said it is up to Parliament to decide on the balance between privacy and anti money laundering requirement. He said the privacy provided by the offline digital euro currently being designed is “close to that of cash”.

Digital euro workplan

Panetta outlined the current work agenda mentioning the need to design a compensation model. This is a challenging topic because intermediaries need to be incentivized to promote the digital euro. At the same time, he mentioned some functionality such as paying another person should be free as it is with cash today. Elsewhere he stated all payments would be free. 

“On top of the basic services, people could choose to make use of any additional services offered by participating intermediaries on a voluntary basis,” said Panetta.

Other work agenda items have already been publicized, such as exploring design options, finalizing prototyping, and market research with technology providers on the technology options.

He reiterated that a decision in the autumn on whether or not to move to the realization phase is not the final decision about whether to issue a digital euro.


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