ECB insists digital euro will be 'an easy, cheap and risk-free complement'

Despite the fact that the decision on whether the eurozone will develop and launch a digital euro is still on a very distant horizon - three or four years ahead, according to the president of the European Central Bank (ECB), Christine Lagarde -, the supervisor European monetary policy is developing a theoretical and technological model on which the future currency could be based. And it must be "a complement and not a substitute" for the euro as we know it, said Mayte Arráez, deputy of the market infrastructure support division of the European Central Bank (ECB)

The expert participated in the conference 'The vision of central banks on the Digital Euro', which kicked off the Revolution Banking 2021 sessions, which took place online on 22 June.

Arráez elaborated on the conclusions that have been obtained to date from the work that the ECB has carried out for the model of a hypothetical online shared currency: a technical report in October of last year and a public consultation that ended in January of 2021. Thus, it has been emphasized that "the euro-digital model advances in parallel with others that are studied by 80% of central banks and governments around the world."

The main characteristic of this future payment system is that "the digital euro is homologated to a physical euro, but in digital format,” Arráez continued, so it will not have either "exchange or convertibility rates.” It will be at the service of citizens and companies as a means of payment that is “completely risk-free, easy and cheap ", with strict security criteria. "And furthermore, it will be offered through payment service providers, who will be the ones who will interact with the citizen ".

Regarding the objectives of this future currency, the deputy of the division of support to market infrastructures of the ECB has emphasized that it will seek to support the digitization of the economy, respond to the lesser use of cash as a means of payment and "to an international reality in which several banks are working. "

In addition, the ECB "will have to cover above all the guarantee of privacy and distinguish between this privacy and anonymity to prevent money laundering," Magí Clave, Deputy Director General of Information Systems of the ECB, has had an impact on his part. Likewise, the future online version of the European currency should guarantee the "operability between currencies and an efficient cross-border payment system". For this reason, the eurosystem is working with several multi-system teams, she detailed.

"Technologies are not going to be a problem, with the little we have experienced," Clave assured, who also reported that "the tests carried out are positive and it is predicted that there will be more than one technology in the final design of the digital euro".

In the middle of this year, the Governing Council of the ECB will make a decision on whether to start the investigation phase, which will focus on the objective of developing a digital euro, but the decision on its actual implementation will not be taken until much later and will require a new decision of the governing body of the issuing institute. The representatives of the central bank have also assured that "they will work in harmony with the rest of the European institutions" in this project.

Translated by Caoimhe Toman