The President of the European Central Bank (ECB), Christine Lagarde, addressed the European Parliament on Monday, shedding light on the expected progress of the digital euro. According to the ECB’s timeline, a full implementation is still at least two years away. This anticipated digital currency, known as the Central Bank Digital Currency (CBDC), is currently in the midst of preparation. However, these preparations depend on the approval of the members of the European Parliament, many of whom have reservations about the initiative.
Christine Lagarde shared her vision of the entire process for the establishment of this digital currency, addressing the EU Parliament’s Committee on Economic and Monetary Affairs.
The next pilot phase of the project is expected to last at least two more years.
Christine Lagarde
Balancing Privacy with Transparency
As discussions on the CBDC gain momentum, a key concern is the perception of intrusiveness into privacy. Christine Lagarde emphasized that while the digital euro aims to provide privacy, it will not guarantee complete anonymity. Striving for a balance, the CBDC aims to be “user-centric“, cost-free, and universally accessible. Lagarde’s statement also aims to debunk “conspiracy theories“, particularly those suggesting global surveillance of individual purchasing behavior through the digital euro.
German Member of Parliament Nicola Beer expressed concerns regarding the potential traceability of transactions, alluding to the ECB’s measures to mitigate money laundering risks and ensure the stability of the commercial banking system. She posed the question, “Will this not discourage the acceptance of the digital euro?” A consensus on privacy measures is crucial before the digital euro can come to fruition, as highlighted by Fabio Panetta, a member of the ECB’s Governing Council. These measures will be overseen by Germany’s Stefan Berger, a key figure in the development of the EU’s MiCA regulation on crypto licenses.
