Lawmakers Could Still Nix Digital Euro, ECB’s Panetta Says

Members of the European Parliament can still stop the European Central Bank from issuing a digital euro, ECB board member Fabio Panetta said on Monday, as lawmakers express growing doubts about the value of a central bank digital currency (CBDC).

Although the ECB has previously said it will decide whether to proceed with the digital euro later this year, its chief executive appeared to admit that political opposition could still prove a crucial obstacle, in comments to parliament’s Economic and Monetary Affairs committee.

“It should be a political decision to take [a digital euro]and then the central bank should be ready to respond, Panetta said.

“If it rings [not to go ahead] done at a political level” – via the European Parliament and the EU Council, which represents member states – “I can’t see any chance of the ECB independently or independently deciding to go ahead,” he added.

Panetta urged lawmakers to pass new laws making the digital euro legal tender – suggesting that merchants accepting digital payments would also have to take CBDC, an issue the ECB has already raised with finance ministers.

“We want to be sure that in any situation, under any circumstances, we will have a framework that will allow all European citizens to pay everywhere in a safe and efficient way at cheap costs,” Panetta told the committee. He cited ECB research suggesting that residents see the ability to pay anywhere as the “most important feature” of a CBDC.

The ECB is also considering how to provide access to around 5% of the population who do not have or want a bank account, including carrying out identity checks via post offices, online or through other intermediaries, Panetta said.

During the debate, Jonás Fernández joined the chorus of lawmakers who questioned the point of the initiative.

“Some people question whether it is necessary to have a digital euro when it is so difficult to distinguish it from other means of payment,” said Fernández, a ranking member of the committee of his center-left Socialists and Democrats party. “What do you think are the benefits that will make us want to continue working on this project?”

But Panetta does not seem deterred, telling a Brussels audience earlier Monday that he did not view comments from lawmakers as skepticism but as welcome scrutiny of his ideas.

“I think they are rightly interested in understanding the details … if we get it wrong there could be a lot of damage,” he said. “We don’t want to make mistakes, but I think it’s good that others want to check this.”