The European Central Bank has been working on developing a central bank digital currency (CBDC), which is quite well-known. According to an executive board member, Fabio Panetta, focus groups that have been assessing the potential rollout of the CBDC have hinted that a key feature could be the ability to use the digital euro online, as well as at any physical stores. On Wednesday, Panetta released a written statement in which he broke down the findings of the focus groups of the ECB on the digital payment methods that had been launched in September 2021. The findings suggest that people would be more likely to accept a digital euro that can be used for making person-to-person payments easily and is accepted in physical and online stores.
Panetta went on to say that a digital euro would have to be accepted by all merchants for them to be able to see the adoption trends seen 20 years ago in the case of the fiat euro. Panetta added that when euro banknotes had been introduced, people had been able to use them for making payments anywhere in the euro region. Therefore, it does not come as a surprise that they would expect to be able to use its digital counterpart wherever they can pay online, or digitally. There were also hints in the focus groups’ findings that merchants and members of the general public where not familiar with the concept of the digital euro.
Instead, they are fearful that as the number of use cases for the digital euro is rising, cash may be phased out altogether. However, once they were able to understand the concept properly, members of the general public who were part of the focus group said that the most desirable feature of the digital euro would be a widespread acceptance online and in all kinds of physical shops. As for merchants, they said that the biggest drive would the high demand.
According to Panetta, the ECB would certainly take these features into consideration, along with the concerns regarding privacy that had been expressed when the central bank had conducted public consultations between October 2020 and January 2021. He also disclosed that the European Central Bank would also do an additional round of focus groups by the end of the year for obtaining data required to develop the relevant policies. He said that they were getting a clearer picture of what merchants and citizens want and would fine tune the digital euro’s design features before it is issued.
He added that there was an important role of co-legislators in order to provide greater privacy. The ECB has been exploring the concept of the digital euro because interest in central bank digital currencies (CBDCs) is increasing all over the world. The first nation that released a CBDC was the Central Bank of the Bahamas in October 2020. China had also begun its trials for one in the same year and it had been made available to international athletes in February at the Beijing Winter Olympics.
