ECB Considers Digital Euro Access, Distribution in Third Design Progress Report
On April 24, the European Central Bank (ECB) released its third progress report on the digital euro design. This time, the bank is considering access and distribution alternatives approved by the Governing Council of the ECB.
Access to the potential of the digital euro clearly puts convenience first. Payment service providers (PSPs) will enter digital euro consumers according to protocols they have defined, such as Know Your Customer verification. Residents, traders and governments in the eurozone will be the first to benefit, with consumers in the European Economic Area and select third countries following the next release. The service will be accessible via the PSP application or the application provided by Eurosystem.
QR codes or touchless technology can be used to make in-store sales. Online and offline “functions” will be possible, and PSP will be allowed to provide optional and value-added services such as separate or periodic payments. According to research, the cross-border function can be implemented after the introduction of the digital euro in the eurozone.
Conditional payments “which are automatically instructed when pre-defined conditions are met” would be possible, but they are not programmable money “to be used only to purchase certain types of goods and/or services, or to purchase them only within a certain period of time. /geography”, which has been set aside.
The ECB also released a report on a focus group survey led by Kantar Public on digital wallet features. Budget management options, as well as peer-to-peer, offline, and QR code payments, were warmly received. However, study participants highlighted concerns about their privacy.
On April 24, ECB executive board member Fabio Panetta testified before the European Parliament’s Economic and Monetary Affairs Committee. “We will take all necessary steps to ensure that the digital euro functions as a true public good,” he assured the committee. “People are under no obligation to use the digital euro,” he stressed. However, they should always have the opportunity to use it. (…) As a result, requiring shops that use digital payments to accept digital euros as legal cash will be more useful and convenient for all users.”
The Eurosystem, which includes the ECB and the national banks of the eurozone, is still conducting its own research for the digital distribution of the euro. In the second quarter of this year, the European Commission intends to propose regulations for establishing a digital euro.
