ECB Official Panetta Casts Doubt on the Future of Digital Euro
Some members of the European Parliament and numerous public representatives increasingly question the necessity of implementing a digital euro across the European Union. Protests against the introduction of the Central Bank Digital Currency (CBDC) periodically occur in various European countries. ECB representatives also harbor certain doubts.
Member of the Executive Board of the European Central Bank (ECB) Fabio Panetta states that the project to create a digital euro could be halted at any moment. This might happen due to parliamentarians and society expressing growing skepticism about implementing a single digital central bank currency (CBDC) in the EU.
Fabio Panetta Addresses the European Parliament. Source: Global Government Fintech
The Central Bank believes a CBDC should be adopted throughout the European Union. The single digital currency should be available for use even by citizens who currently lack bank accounts. However, some lawmakers and the majority of the public deem this unacceptable. They interpret it as excessive pressure and a violation of citizens' constitutional rights, urging the complete abandonment of the digital euro concept.
Previously, ECB representatives assured that the project's fate would be determined in the near future, and the bank would announce its decision on the digital euro project's continuation. However, with his statement, it seems the ECB Executive Board member acknowledged that lawmakers, through the parliament's economic and monetary affairs committee, might expedite this process.
There should be a political decision to issue [a digital euro], and then the central bank should be ready to respond,” Panetta said. “If that call [not to go ahead] is done at the political level– via the European Parliament, and the European Union’s Council, which represents its member states
I cannot see any chance of the ECB deciding autonomously or independently to progress,he added.
If the project is not halted, Fabio Panetta urged lawmakers to finally make up their minds and pass new laws. The digital euro should become a legal means of payment in the EU. Panetta means that merchants already accepting digital payments should also accept CBDC. This issue has been discussed with finance ministers before, but it remains unresolved.
According to Panetta, the European Central Bank has conducted research showing that the ability to pay freely and securely without high fees is considered the most important function of a central bank digital currency. Therefore, they aim to ensure that all European citizens have access to a system that allows them to pay safely and efficiently under any circumstances.
According to Panetta, the ECB is also considering the possibility of involving nearly 5% of the population that does not have or does not want to deal with bank accounts in the future use of the digital euro. They plan to implement this through identity verification procedures at post offices, online, or through other intermediaries.
During the debate, lawmaker Jonás Fernández joined a group of legislators who questioned the necessity of introducing the digital euro.
Some people are calling into question of whether it is necessary to have a digital euro when it's so difficult to distinguish it from any other payment method. What do you think are the advantages that would make us want to continue working on this project?said Fernández, ranking member on the committee of the center-left Socialists and Democrats party.
But Panetta reacted positively to such calls. He noted to the Brussels audience that he views such legislators' comments not as skepticism but as a desire to understand the project idea better.
I think they are rightly interested in understanding the details … if we make mistakes there could be big damage. We will not make mistakes, but I think it is good that others want to check this,Fernandez said.
