The EU Council confirmed its negotiating position on the digital euro on Friday afternoon after an agreement was reached earlier this week, Politico reports.
It is now up to members of the European Parliament to agree on the legal text so that both sides can start legislative negotiations next year.
The digital euro is the European Central Bank’s response to Meta’s failed attempt to launch its own virtual currency, called Diem, for its three billion users. After Diem’s collapse, policymakers at the ECB presented the project as a key strategy to reduce the bloc’s reliance on US card giants Mastercard and Visa for cross-border payments.
EU shoppers could pay with the virtual currency, guaranteed by a central bank, across the bloc via a plastic card or smartphone app. The proliferation of “Big Brother”-style conspiracy theories has prompted policymakers to take extra measures to reassure the public that authorities will not use the digital euro to monitor citizens’ payment habits.
– You cannot ignore the concerns of many millions of citizens. China has explicitly said that they want to build a digital yuan to increase control over the people. It scares me – said Fernando Navarrete, a member of the European People’s Party who is leading the law through the Parliament.
Navarrete is skeptical of the initiative, but the idea of an offline version of the digital euro that would protect citizens’ privacy is acceptable to him.
– I am not saying that it will be used for surveillance, but we know that the technology has that potential – he added.
Conversely, consumer groups welcome the initiative, on the premise that the digital euro is secure, free and private. Banks are far less enthusiastic, especially as they will have to distribute basic digital euro services to their customers at no additional cost, a bill that could amount to more than five billion euros over four years, according to ECB estimates.
The Commission’s original proposal and the ECB’s envisioned design already prevent the central bank from linking digital euro accounts to citizens’ personal data. This, however, was not enough for some countries, especially Belgium and the Netherlands, who fear that the project could be politically abused. The final text further strengthened privacy protections, clearly stating that central banks “must not be in a position to lift these segregation measures during any data processing.”
(Vijesti.ba / FENA)
