ECB executive board member Fabio Panetta said that in the transition to the digital euro, the ECB will better protect users’ confidential data than private firms.
In a recent interview, Fabio Panetta said that in addition to the interest in the digital euro, users are very concerned about the security of their data.
Panetta explained that unlike private firms, the European Central Bank has no commercial interest in storing, managing or monetizing user information. So if central banks are involved in digital payments, they can better protect people’s privacy. There are many ways to do this, according to Panetta. One of them is to conduct inspections required by law to prevent illegal transactions carried out for money laundering, terrorist financing or tax evasion.
“We are not like private firms. People will feel more secure if their data is processed by a government agency. The central bank will cope with this task in the best possible way, then the information of users will be under reliable protection, ”Panetta said.
He was also asked if the ECB considers other central bank digital currencies or public cryptocurrencies to be a threat to the payments industry. Panetta responded that there are always external potential threats that can change people’s attitudes towards digital tools. Such risks include the issuance of an international stablecoin. Taken together, these can fundamentally change how payments are made, which will affect both the financial system and society as a whole. And this is causing great interest among people, added the ECB councilor.
According to recent estimates of analysts at the investment bank Morgan Stanley, if the digital euro is widely introduced, about 8% of deposits from European commercial banks may “flow” into it. However, ECB researchers believe that if central banks do not launch government stablecoins in the near future, they could be outstripped by the large tech giants who will introduce their digital currencies.
