FRANKFURT, Apr 14 (Reuters) – Eurozone citizens expect the digital euro proposed by the European Central Bank to be private, secure and cheap, according to an ECB survey released on Wednesday.
The ECB is working on creating an electronic form of cash to supplement banknotes and coins, in an attempt to curb competition from cryptocurrencies such as Bitcoin, Tether and Diem, Facebook’s proposed digital currency.
An ECB survey showed that privacy when making payments, a key feature of cash that some fear will be lost when switching to an electronic means of payment, was the number one priority for both individuals and professionals.
“What respondents want most from a digital euro is privacy (43%), security (18%), ease of use across the euro area (11%), no additional costs (9%) and offline use (8%), “the ECB said in a report presenting the results of its inquiry.
A digital euro would give its holders a direct claim on the ECB, making it more secure than a commercial bank account or digital wallet.
This has raised concerns that the population, especially in times of crisis, will shift their savings to digital euros, exacerbating withdrawals of bank deposits or even jeopardizing the business model of the financial sector.
The ECB consultation showed that half of the respondents were in favor of introducing a limit to the number of digital euros that each citizen can own or a staggered remuneration by which balances that exceed a certain threshold are penalized.
Two-thirds of those surveyed said that e-money should be offered by private sector intermediaries and integrated into the existing payment system, and a quarter also wanted it to be offered as a “smart card” or phone app so they could spend it offline .
Since the design of a digital euro is still in an early stage, the launch of the new payment method is not expected for four to five years.
Other central banks around the world are also working on similar projects, and China already has pilot programs.
(Reported by Francesco Canepa; edited by Balazs Koranyi and Toby Chopra, translated by Michael Susin at the Gdansk newsroom)