The recent bank collapses and bailouts have highlighted the fragility of the banking system and raised concerns about the safety of our bank deposits. In this context, the digital euro presents an opportunity to reimagine our monetary system in a way that prioritises the interests of people and society! Together with the Positive Money Europe, we have published our position paper ‘A digital euro for the people’ to contribute to the design and development of a digital currency that truly serves people as a public good.
The current plan relies heavily on private financial intermediaries and envisions putting important limitations on the use of digital euros, thereby impacting its capacity to be a universally accessible public good and risking undermining the uptake of the digital euro.
By heeding to the bank lobby and baking their interests into the design of the digital euro, the ECB is missing an opportunity to develop an appealing and public digital alternative to private bank deposits.
The digital euro must be developed with the aim of benefiting people and society over private interests, and these considerations should guide its design. In the short term, the digital euro should:
- 1) Be universally accessible. People should be able to access digital euros through a diverse range of intermediaries, which include non-profit and public entities.
- 2) Be free of cost for users. Any future legislative framework on the digital euro should include a list of basic services that should be provided for free to users, such as opening and managing an account and the provision of a payment instrument (e.g. a card).
- 3) Offer a high level of privacy and data protection. Cash, which is fully anonymous, should be used as the baseline when developing the digital euro.
- 4) Have a clear European Central Bank branding. Clear branding will help to differentiate public digital euros from private bank deposits.
- 5) Bring resilience to the payment system. By providing an offline value-based option, and by ensuring that the digital euro’s legal and technical core infrastructure is public and works independently of any private system, we can offer an alternative to existing payment rails and increase resiliency in case of outages.
The digital euro is also an opportunity to improve financial stability, transform banking and enhance monetary policy. The design of the digital euro should be flexible enough to allow for the achievement of these long-term goals.
The ECB is still considering the feedback it received on the plan, and is committed to making the digital euro a success. However, it remains to be seen whether the ECB will be able to address the concerns of the people and civil society in terms of making the digital euro a truly public good.
It is crucial to seize the opportunity presented by the digital euro to establish a safer, more inclusive monetary system. Only by designing it in alignment with people’s interests can we ensure its success and harness its full potential!