A digital euro is at least two years away, the European Central Bank’s president told lawmakers on Monday as she sought to address privacy fears arising from the central bank digital currency (CBDC).
The ECB is due to take major decisions over whether to press ahead with preparations for the CBDC in the coming weeks, but many members of the European Parliament – who would need to sign off on the plans – appear skeptical.
“It’s not until later in October that the [ECB] Governing Council will decide whether we can move ahead with more piloting of the project,” ECB President Christine Lagarde told lawmakers on the EU Parliament's Economic and Monetary Affairs Committee. “The pilot will probably take us another two years, at least, before it’s the final say.”
If “we can address all the conspiracy theories that abound about this – as if Big Brother was going to suddenly determine what you buy, when you buy it and how restricted it should be – then I think it would be characterized as a success,” Lagarde said, adding that the digital euro will need to offer privacy without full anonymity, and be user-friendly, free and universal.
ECB Board Member Fabio Panetta has previously promised there’ll be no decision to issue until lawmakers and the bloc's member governments agree on legislation to set out privacy measures for the CBDC, and they still have plenty of qualms.
“How do you check all the major privacy concerns if you ask for transaction and holding limits, and identification, with the consequence of total traceability?” German centrist lawmaker Nicola Beer asked Lagarde on Monday, referring to ECB plans intended to curb money laundering and stop large CBDC holdings from upending the commercial banking system. “Will this not hinder the acceptance of the digital euro?”
Last month, the parliament announced that the digital euro law will be shepherded through the parliament by Germany’s Stefan Berger, an architect of the EU’s crypto licensing law MiCA.
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