BRUSSELS — Fabio Panetta, a board member of the European Central Bank (ECB), has revealed that the European Parliament still holds the power to halt the ECB’s plans to launch a digital euro.
The news comes amid growing skepticism among lawmakers regarding the benefits of introducing a central bank digital currency (CBDC).
Despite the ECB’s previous announcement that a decision on the digital euro’s launch would be made later this year, Panetta conceded during a meeting with the parliament’s Economic and Monetary Affairs Committee that political resistance could pose a significant impediment to the project’s implementation.
“There should be a political decision to issue [a digital euro], and then the central bank should be ready to respond,” Panetta said.
“We want to be sure that in any situation, in any circumstance, we will have a framework that would allow all European citizens to pay everywhere in a safe and efficient manner at cheap costs,” Panetta told the committee.
According to Panetta, ECB research indicates that the “most important feature” of a CBDC, as perceived by citizens, is the ability to make payments from anywhere.
The ECB is in the midst of determining how to provide access to banking services for the 5% of the population who do not have or refuse to obtain a bank account.
This includes exploring options such as conducting identity checks through Post Offices, online platforms, or other intermediaries.
Panetta has faced scrutiny from other lawmakers, including Spanish economist and politician who has been serving as Member of the European Parliament since 2014, Jonás Fernández, who question its necessity.
“Some people are calling into question of whether it is necessary to have a digital euro when it’s so difficult to distinguish it from any other payment method,” said Fernández.
“What do you think are the advantages that would make us want to continue working on this project?”
Nevertheless, Panetta appeared to be unfazed by the criticism, stating he did not perceive their comments as skeptical but rather a constructive review of his proposals, which he welcomed.
“I think they are rightly interested in understanding the details, said Panetta.
“If we make mistakes there could be big damage. We will not make mistakes, but I think it is good that others want to check this.”