European Central Bank (ECB) President Christine Lagarde says that the digital euro currently being worked on by the EU will adhere to strict privacy rules.
In an announcement from the ECB, the central bank says that it’s moving into the “preparation phase” of its digital euro project following a decision from its Governing Council.
The ECB says that the digital euro aims to be a form of cash that could be used for all digital payments in Europe, and would be free of charge both online and offline in a private manner.
“The Eurosystem envisions a digital euro that would be free for basic use for individuals. A compensation model between intermediaries and merchants would ensure that there are incentives for intermediaries to distribute digital euro, as is the case for other electronic payment instruments, and that there are adequate safeguards against excessive service charges for merchants. The Eurosystem would bear its own costs, including those related to scheme management and settlement processing…
It could be used from person to person, at the point of sale, in e-commerce and in government transactions. No digital payment instrument offers all these features. The digital euro would fill that gap.”
Lagarde says that the digital euro will have the “highest privacy standards” and will co-exist comfortably with physical cash.
“We need to prepare our currency for the future. We envisage a digital euro as a digital form of cash that can be used for all digital payments, free of charge, and that meets the highest privacy standards. It would coexist alongside physical cash, which will always be available, leaving no one behind.”
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