The ECB will now analyse in detail the large number of responses – 8,221 is a record for ECB public consultations – submitted to an online questionnaire.
The public consultation was launched on 12 October 2020, following the publication of the Eurosystem report on a digital euro. The ECB will publish a comprehensive analysis of the public consultation in the spring, which will serve as an important input for the ECB’s Governing Council when deciding whether to launch a digital euro project.
“The high number of responses to our survey shows the great interest of Europe’s citizens and firms in shaping the vision of a digital euro,” said Fabio Panetta, Member of the ECB’s Executive Board and Chair of the task force on a digital euro. “The opinions of citizens, businesses and all stakeholders are of utmost importance for us as we assess which use cases a digital euro might best serve.”
The The Eurosystem comprises the European Central Bank and the national central banks of those countries that have adopted the euro. task force, bringing together experts from the ECB and 19 In general, the expression refers to the central banks of different countries. of the euro area, identified possible scenarios that would require the issuance of a digital euro. These scenarios include an increased demand for electronic payments in the euro area that would require a European risk-free digital means of A transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee., a significant decline in the use of cash as a means of payment in the euro area, the launch of global private means of payment that might raise regulatory concerns and pose risks for financial stability and consumer protection, and a broad take-up of central bank digital currencies issued by other central banks.
A digital euro would be an electronic form of central bank From the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for g... More accessible to all citizens and firms – like banknotes, but in a digital form – to make their daily payments in a fast, easy and secure way. It would complement cash, not replace it. The Eurosystem will continue to issue cash in any case. In a September 2020 speech on payments in digital world, ECB President C. Lagarde said “The Eurosystem will continue to ensure that all citizens have access to banknotes at all times. A digital euro, in any event, would be a complement to, not a substitute for cash.” However, the ECB report on a digital euro stresses that a significant decline in the use of cash as a means of payment is one of the scenarios that could trigger the issuance of a digital euro.
A digital euro would combine the efficiency of a digital Device, tool, procedure or system used to make a transaction or settle a debt. with the safety of central bank money. The protection of privacy would be a key priority, so that the digital euro can help maintain trust in payments in the digital age. An initial analysis of raw data shows that privacy of payments ranked highest among the requested features of a potential digital euro (41% of replies), followed by security (17%) and pan-European reach (10%).
Managing the privacy of A digital payment instrument, denominated in the national unit of account, and a direct liability of the central bank, like banknotes. A general purpose CBDC can be used by the public for day-to-day p... More is frequently raised as a major challenge by many experts and observers and have been growing relentlessly as data theft and security breaches are on the rise. Financial Times Alphaville editor Izabella Kaminska has dubbed this the “privacy paradox” and has stressed that a CBDC will be a trade-off between privacy and compliance with Anti-Money Laundering and Know Your Customer regulations. Charles Kahn, research fellow at the Federal See Central bank. of Saint-Louis wrote in a 2018 See Banknote paper. on Payment Systems and Privacy, “Privacy in payments is desired not just for illegal transactions, but also for protection from malfeasance or negligence by counterparties or by the payments system provider itself. Proposals to abolish cash take inadequate account of these legitimate demands for privacy.”
In a June 2020 staff note on Privacy in CBDC Technology, Bank of Canada has outlined technologically feasible options to ensure privacy in a CBDC. The note emphasises that “Techniques to achieve cash-like privacy are immature. They have limited deployments, none of which comply with know-your-customer (KYC) and anti–The operation of attempting to disguise a set of fraudulently or criminally ob- tained funds as legal, in operations undeclared to tax authorities, and therefore not subjected to taxation. Money laund... More (AML) regulations. Their risks include hidden vulnerabilities, a lack of scalability and complicated operations. Maintaining privacy and complying with regulations (the latter which requires disclosure of information) present a dichotomy for a CBDC. This is further complicated by the need for proactive disclosure to prevent fraud.”