Digital Euro: A Step Forward for the Eurozone’s Payment System

• The Digital Euro will be free to use and will be accessible to all.
• It is up to legislators to decide what personal information the Central Bank will have access to.
• The preliminary phase of the digital euro project is expected to be completed by 2023.

The European Central Bank (ECB) announced on January 23 that the Digital Euro will be free to use and accessible to all. However, legislators will decide what personal information the Central Bank will have access to. This announcement comes as the ECB begins its preliminary phase of the digital euro project which is expected to be completed by 2023.

Fabio Panetta, a member of the ECB’s Executive Board, said, “It will then be up to you, the co-legislators, to establish the optimal balance between the protection of privacy and the achievement of other important objectives of a public nature.” These objectives include the fight against money laundering, the financing of terrorism, tax evasion, and compliance with any sanctions.

To ensure privacy, researchers have recommended a supervised intermediary approach for the Digital Euro. This means that private banks will be allowed to incorporate the digital euro into their systems as intermediaries. This approach would allow the ECB to develop its own standalone payment app or allow private banks to incorporate the digital euro into their systems as intermediaries.

The development of the Digital Euro is part of a larger effort from the European Commission to modernize the payment system in the Eurozone. This effort has been ongoing since the adoption of the Payment Services Directive II in 2018, which was designed to ensure that payment systems in the Eurozone are secure and efficient.

The Digital Euro will be a major step forward for the Eurozone, as it will make it easier for individuals and businesses to transact with each other. Additionally, it will reduce the cost of payments and make them more secure. This will make it easier for individuals and businesses to do business with each other, and in turn, stimulate economic growth.

Ultimately, the Digital Euro will be up to the legislators to decide how the Central Bank will access personal information. However, the preliminary phase of the project is expected to be completed by 2023. This is an exciting development for the Eurozone, and it will be interesting to see how the Digital Euro is implemented in the coming years.