This article has been republished with permission from Binance News.
According to Cointelegraph, European Central Bank (ECB) executive board member Fabio Panetta has expressed satisfaction with the European Commission’s (EC) legislative proposals for the digital euro. In a speech to the European Parliament’s Committee on Economic and Monetary Affairs on September 4, Panetta said the proposals put Europe at the forefront of advanced economies in central bank digital currency (CBDC) development, potentially preventing private dominance in the financial sector.
The EC made its proposals public on June 28, and Panetta, a critic of cryptocurrency, called the proposals for the euro CBDC a new paradigm for preserving monetary sovereignty. He said this would ensure Europeans always have access to a public payment option, whether it was cash or digital, even as closed-loop solutions become increasingly prevalent in private payment services. Panetta compared private payment systems to private messaging, where users are pressured to join the most popular systems.
Panetta also praised the EC’s privacy proposals for the digital euro, stating that the Eurosystem would be unable to see the personal details of digital euro users or connect any payment information to private individuals. Intermediaries would only see the user information needed for onboarding and compliance with existing regulation. Furthermore, the possibility to pay offline would provide cash-like privacy, with neither the intermediary nor the central bank processing the payment, Panetta said.
The proposals also included reasonable pricing policies and allowing the ECB to maintain equilibrium in the financial systems with tools like holding limits. Panetta emphasized that the issuance of a digital euro represents an opportunity, not a risk, for the European financial sector. He warned that the alternative to introducing a CBDC is not maintaining the status quo, but rather losing ground to new private solutions that could impact the economy. Panetta cited PayPal’s recently introduced PayPal USD (PYUSD) stablecoin as an example of potential risk.