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April 15, 2021

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Europeans want ‘private’ digital euro

Source: Agencies | 00:00 UTC+8 April 15, 2021 | Print Edition

Eurozone citizens expect the European Central Bank’s proposed digital euro to be private, safe and cheap, an ECB survey showed yesterday.

The European Central Bank is working on creating an electronic form of cash to complement banknotes and coins in a bid to stem competition from cryptocurrencies such as Bitcoin, Tether and Facebook’s proposed Diem.

An ECB poll showed that privacy when making payments, a key feature of cash that some fear will get lost when switching to an electronic means of payment, was the No. 1 priority for both private individuals and professionals.

“What the respondents want most from a digital euro is privacy (43 percent), security (18 percent), usability across the euro area (11 percent), the absence of additional costs (9 percent) and offline use (8 percent),” the ECB said in a report presenting the results of its consultation.

A digital euro would give holders a direct claim on the ECB, making it safer than an account held at a commercial bank or a digital wallet.

This has raised some concerns that people, particularly at times of crisis, would shift their savings into digital euros, exacerbating bank runs or even upending the financial sector’s business model.

The ECB consultation showed that half of respondents were in favor of introducing a cap on how many digital euros every citizen can own or a tiered remuneration whereby balances above a certain threshold are penalized.

Two thirds of respondents said the electronic cash should be offered by private-sector intermediaries and integrated in the existing payment system.

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