A European central bank digital currency could be programmed to pay rent monthly, but a government would not be able to program in control over how digital euros are spent.
The European Central Bank will not issue a digital euro that can be programmed to limit how it is used, an executive board member promised on Monday.
Fabio Panetta told a committee of the European Parliament that while it would be possible to program a regular payment — paying rent for example — Panetta said it would not be possible to “set any limitations on where, when or to whom people can pay with a digital euro.”
In the U.S, for example, recipients of the Supplemental Nutrition Assistance Program (SNAP) — which used to be known as food stamps — cannot use the funds for alcoholic beverages, cooked food, restaurants or non-food items like laundry detergent usually found in supermarkets.
Such limitations, Panetta said, “would be tantamount to a voucher. And central banks issue money, not vouchers.”
Panetta also added — or rather reiterated — that the ECB is “aware of some people’s concerns that a digital euro could harm the confidentiality of their payment data.”
That’s a nearly universal concern when it comes to CBDCs, even in China where adoption of the e-CNY, or digital yuan, is said to be slow in part because people believe it will be used by the government to track their purchases in more detail — preferring to use the hugely popular Alipay and WeChat Pay apps.
As for the ECB, Panetta stressed that European Parliament legislators will be the ones to “decide on the balance between privacy and other important public policy objectives like anti-money laundering, countering terrorism financing, preventing tax evasion or guaranteeing sanctions compliance.” But, he added:
“When it comes to the central bank, we propose that we do not have access to personal data … we have been working on solutions that would preserve privacy by default and by design.”
This article has been originally published at: https://coinmarketcap.com/alexandria/article/ecb-promises-no-limitations-on-digital-euro