The second phase, the preparation phase, for the digital euro will start on 1 November and will initially last two years. This was announced by the ECB after today's decision by the Board of Governors that this period "will involve the finalisation of the manual of rules for the digital euro and the selection of providers who could develop the necessary platform and infrastructure. In this phase, tests and trials will also be carried out to create a digital euro." After two years, the Governing Council will decide whether to move on to the next stage of preparations, creating the conditions for a possible issuance.
"We need to prepare our currency for the future," said Christine Lagarde, the ECB's president. "We conceive of a digital euro as a digital form of cash that can be used free of charge for any digital payment and that meets the highest standards of confidentiality. A digital euro would complement cash, which will always be available, so that no one is left behind." "In light of citizens' growing preference for digital payments, we should stand ready to issue a digital euro alongside cash," said Fabio Panetta, Member of the ECB's Executive Board and Chair of the High-Level Task Force for a Digital Euro. "A digital euro would increase the efficiency of European payments and contribute to Europe's strategic autonomy."
EU privacy authority: "Data protection with the digital euro is good"
The proposal for an EU regulation on the digital euro is good with respect to data protection and the fact that an offline mode is provided to minimize data processing. And "great favor" with respect to the fact that you will always be able to choose whether to pay in digital euros or in cash. This was stated by the European Data Protection Board and the European Data Protection Supervisor in a joint opinion on the proposal. However, they are calling for clarification on how the identification of digital euro users will be processed. And to assess whether the single access point to the digital euro is necessary and proportionate, or whether there are technical measures for decentralised storage of identifiers.
Under the proposed regulation, the ECB and national central banks can set up a single access point to verify that the amount of digital euros held by each user does not exceed the maximum amount allowed (a 'holding limit'). With respect to the fraud detection and prevention mechanism, the judgment of the EDPB and EDPS is that it lacks predictability. With the processing of personal data under the ECB's mechanism of payment service providers "not being clearly defined". It is therefore recommended that the need for this be demonstrated and that less intrusive measures be considered with respect to the impact on data protection. The role of the ECB, national central banks and payment service providers in this context should also be defined, in accordance with key data protection principles. It is also "strongly" recommended to introduce a 'privacy threshold' for online transactions, below which they should not be tracked.
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