In the third day round of debate this Saturday, the European Central Bank is discussing the implementation of the Central Bank digital currency (CBDC or Digital Euro), focused on maintaining price stability during the integration process. This afternoon the governours of their respective national central banks discussed the in-depth structure of their final proposal.
The emissary of the Finish national bank emphasizes that cyber security and the risk of cyber-attacks should take on a limited of the ECB’s agenda. They proposed a referral to the European Commission, as the final measures relating to digital security should be created by trained professionals that are more suited for this task. The representative of France supported this statement, supported by a statistic that only 9% of cyber security attacks are finance and banking related. While this number is far from insignificant, there are much more pressing decisions to be made.
The representative of the national bank of Greece highlights that the intention of the CBDC is not to “reinvent the wheel” as the digital Euro should aim at imitating the functionality of traditional transaction methods. One of these functions would be the possibility to transfer money anonymously and privately. While this is a significant contributor for the money laundering risk, this component could drastically increase users' trust in the CBDC. One idea for this issue is the implementation of a payment threshold that limits the sharing of data about the transaction under a pre-defined amount. Below this threshold, transactions would be private to the parties involved; above this number, an authorial power would step in place to monitor the transaction. The governour of the national bank of Belgium emphasized the need for transparent intermediaries that imitate cash-like measures such as the aforementioned payment threshold as well as the ability for offline payment methods. Furthermore, they refer to the European Digital Entity framework by proposing that users should be able to decide what data they want to share as a function of their digital wallets.
Tomorrow we can look forward to more practical and distinct solutions to the matter at hand, like a precise amount of the payment threshold and the answer to the question whether currency would be managed in a centralized manner.
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