Panetta digital euro: “It will take 4-5 years. No competition with banks "
The member of the board of directors of the ECB: "In the summer the results of the exploratory analysis in the light of which we will decide whether to continue. We will offer safe money, not financial services which are the responsibility of credit institutions "
09 Feb 2021
The digital euro will not lead the ECB on a collision course with commercial banks which, on the contrary, in the intentions of the European Central Bank, will be partners and not competitors. This was stated in an interview with Der Spiegel by Fabio Panetta, a member of the ECB board of directors and a man at the forefront of the digital euro project, which, as anticipated in recent weeks by President Christine Lagarde, could become a reality within the next five years.
“We will offer safe money, not financial services - explained Panetta - Offering financial services is the role of commercial banks. It would be crazy for us to do it. People already decide today whether to pay with cash, with various cards or online. In the future they will have an extra digital option, if they so wish ".
In concrete terms, European citizens will be able to have an account in digital euros directly with the European central bank but with a deposit limit that could be set - said Panetta - "for example at 3 thousand euros, which is already a threshold above the cash needs. of most people ". Any sums above this threshold could be subject to passive interest rates, making them unattractive compared to the offers of commercial banks. All these aspects, Panetta pointed out, are however still the subject of discussion.
“Our main motivation - he said - is the digitization of the financial sector”. With this in mind, a digital euro would offer a simple, secure and reliable means of payment that would be at no cost, would ensure data protection and would be accepted throughout the eurozone.
For the introduction of the digital euro "it will realistically take 4 or 5 years. We will also have to consult the other European institutions and authorities. The ECB has set up a working group with the European Commission ”, explained Panetta.
“We are not late - he added - we are keeping pace with the other main central banks. The market is evolving rapidly, but we must be 100% certain that we are offering a product of the highest quality. And this takes time ”. In any case, he pointed out, an experiment similar to the one that the Chinese central bank is conducting “could be a possibility. It would certainly be prudent to experiment with the use of the digital euro in different cities ".
At the beginning of the summer - added Panetta - we will present the results of our exploratory analysis to the Governing Council of the ECB, which will decide whether to continue the initiative. In the event of a positive response, work will begin to identify the operational area and the technical solution to be adopted for the digital euro. It will take at least 18 months. Subsequently, the Governing Council of the ECB will have to adopt another decision, in order to start the implementation phase of the chosen solution ".
“Citizens - said Panetta - use cash less and less and make more and more digital payments, at the supermarket as well as online. Today, one in two Europeans prefers to pay with digital tools, according to a trend that has been underway for some time and accelerated by the pandemic. In addition to cash, consumers increasingly require efficient digital means of payment, capable of guaranteeing confidentiality and usable anywhere in the euro area. We want to be ready to respond promptly to this need, which according to experts will continue and strengthen itself ".
On the functioning of the digital euro, Panetta is not unbalanced: "The details have not yet been defined, we have just concluded our consultation with the public. But the goal of a possible digital euro should be to provide an alternative to other digital payment tools characterized by simplicity, universally accepted, secure and reliable. And the cash would not disappear ”.
The ECB has not even decided on the limits on the amounts of digital euro that everyone can hold. "In theory, no - explains Panetta - As with cash and unlike other payment instruments, the digital euro would represent an activity of savers towards the central bank and not towards private banks. However, banks would play an important role in distribution, not unlike what happens for cash, which citizens withdraw from ATMs or bank branches ”.