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ECB Says Public Values Privacy Above All in Digital Euro Project - BLOOMBERG
- Public consultation also shows demand for offline use
- ECB is among central banks exploring use of digital cash
The European Central Bank’s public consultations on a digital euro have revealed that privacy is valued above all other features for any new form of the currency.
The top priority for 43% of citizens and professionals who responded was for their payments to remain private, according to a report published by the institution on Wednesday. Other features that were considered important included security, usability across the euro area, the absence of additional costs, and offline use.
While the ECB hasn’t yet decided whether it will launch a digital euro, the consultation is a first step in determining what kind of design would make it acceptable and usable for consumers and businesses.
Central banks around the world are toying with the idea of issuing a digital version of their currencies to keep up with technological advances that have spurred the rise of cryptocurrencies like Bitcoin.
Digital Ambitions
Central banks are at varying stages of developing digital currencies
Source: Bloomberg
Bitcoin rose to a record high on Wednesday, and traders are closely watching the public debut of Coinbase Global Inc. The cryptocurrency exchange may be valued at $100 billion, making it worth more than the New York Stock Exchange and Nasdaq Stock Market combined.
“We will do our best to ensure that a digital euro meets the expectations of citizens,” ECB Executive Board member Fabio Panetta said in statement alongside the report.
When choosing specifically between an offline digital euro focused on privacy, an online one with innovative features and additional services, or a combination of the two, “citizens generally opted for an offline solution focused on privacy, ” the ECB said in its report.
A minority actively opposed the issuance of a digital euro, mainly because they didn’t believe that the ECB would maintain the availability of cash and would use the new tool to pass on deeply negative interest rates to consumers, it said.
Other key takeaways from the report include:
- Around a quarter of respondents took the view that a digital euro should make cross-border payments faster and cheaper. They want the digital euro to be usable outside the euro area, though with limits
- Despite prioritizing privacy, both citizen and professional respondents supported requirements to avoid illicit activities, and less than one in ten were in favor of anonymity
- A quarter of the respondents favored end-user solutions comprising smart cards or a secure element in smartphones to facilitate cash-like features
- The consultation was launched on Oct. 12 and concluded on Jan. 12, receiving over 8,200 responses, 94% of which were from private citizens.
The ECB’s Governing Council will decide in mid-2021 “whether to launch a formal investigation phase in view of a possible launch of a digital euro,” the report said.
— With assistance by Zoe Schneeweiss
