JAKARTA - Christine Lagarde, President of the European Central Bank (ECB), recently announced that the digital euro being developed by the European Union will be subject to very strict privacy regulations. According to an announcement from the ECB, the central bank has entered the "preparatory stage" of the digital euro project after obtaining approval from the Governing Council.
The digital euro is expected to be a form of cash that can be used in all digital transactions in Europe. Additionally, the digital euro will be free of charge, both when used online and offline, and will safeguard user privacy.
"The Eurosystem, which is a cooperation between various central banks, envisions the digital euro as a basic means of payment that is free for individuals," the ECB said in its announcement.
"In this system, there will be a fee reimbursement mechanism between intermediaries and traders, so that intermediaries have an incentive to distribute digital euros, as with other electronic payment instruments. This will also protect traders from excessive service fees. The Eurosystem will cover these costs itself, including those related to scheme management and settlement processing."
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The Eurosystem can be used by individuals in person-to-person transactions, at points of sale, in e-commerce, and in government transactions. No other digital payment instrument can offer all these features. The digital euro is expected to fill this gap.
Lagarde stressed that a digital euro would set the "highest privacy standards" and would coexist with physical cash. "We need to prepare our currency for the future," said Lagarde.
"We envision the digital euro as a form of digital cash that can be used in all digital transactions, without fees, and which maintains user privacy very strictly. The digital euro will go hand in hand with physical cash in that it will always be available to anyone," he added.
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