Chairman of the Digital Euro Association: ‘The primary aim of the digital euro is still not clear’
The European Central Bank (ECB) is planning to launch a prototype of the digital euro in 2023. In the next five years, Europe could have its own central bank digital currency (CBDC) up and running. However, there are still many questions surrounding the prospective digital currency. In what form could it be issued? Is the ECB too late to the CBDC party, especially compared to other central banks such as that of the People’s Republic of China? To address these and other questions, Cointelegraph auf Deutsch spoke with Jonas Gross, chairman of the Digital Euro Association (DEA) and member of the expert panel of the European Blockchain Observatory and Forum.
Gross said that compared to digital cash issued by a commercial bank, central bank money carries fewer risks. A commercial bank can always go bankrupt, but a central bank cannot because in an emergency, it can print as much money as needed. And, in times of crisis, people may want, at least in theory, to transfer all their digital money from a private bank to the central bank, which will mean the end of the commercial banks’ business.
There are two potential mechanisms to avoid such a scenario: Either to set a cap on the amount of funds that a citizen can hold in central bank money or implement a negative interest rate applied to CBDC funds above a specified limit.
The digital euro will not be adopted by European Union citizens if it won’t have certain features such as complete anonymity, said Gross. His team did a study that showed that it is technologically possible to make a digital euro just as anonymous as cash. It is also technically possible, Gross maintained, to allow digital euro payments to remain anonymous only up to a certain threshold, let’s say up to 10,000
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