The European Central Bank (ECB) published on April 24 its third report on the progress of the design of the digital euro. On this occasion, the bank examined the access and distribution options approved by the Governing Council of the ECB.
Convenience is clearly a priority for access to the digital euro potential. Users of the digital euro will be admitted by payment service providers (PSPs) following their established procedures, such as “know your customer” verification. Initially, residents of the euro area, traders and Public Administrations would be included, and later consumers from the European Economic Area and from certain third countries. The services would be available through the PSP application or an application provided by the Eurosystem.
Sales in stores could be made with a QR code or contactless technology. Online payments and offline “functionality” would also be possible, and PSPs could offer optional and value-added services, such as installment or recurring payments. Cross-border functionalities could be added after the launch of the digital euro in the eurozone, according to the report.
Conditional payments “that are automatically instructed when predefined conditions are met” would be possible, but it would not be programmable money “that is used only to buy specific types of goods and/or services, or to buy them only within a certain period/geography “, what has already been excluded from consideration.
The ECB also published a report on a survey carried out by the consultancy Kantar Public in which the characteristics of digital wallets were analyzed. According to the study, budget management tools and peer-to-peer, offline, and QR code payments were well received. However, the study participants raised privacy concerns.
Europeans see the ability to pay anywhere as the most important feature of a potential digital euro, says Executive Board member Fabio Panetta. People should always have the option to use it, just like they do with cash today.
Speech https://t.co/XXZ3YMnQAu
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—European Central Bank (@ecb) April 24, 2023
Fabio Panetta, member of the Executive Board of the ECB, appeared before the Committee on Economic and Monetary Affairs of the European Parliament on 24 April. “We will take all necessary measures to ensure that the digital euro acts as a true public good”, testified before the commission. And he added:
“Citizens would not be required to use the digital euro. But they should always have the option to use it. […] Thus, it would be more beneficial and convenient for all users if merchants that accept digital payments were obliged to accept the digital euro as legal tender.”
The Eurosystem, made up of the ECB and the national banks of the euro area, continues to carry out its own study on the distribution of the digital euro. The European Commission plans to propose a regulation to establish a digital euro in the second quarter of this year.
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