European Central Bank to use digital euro to combat “threats” such as Bitcoin and stablecoins

• The European Central Bank has continued to develop its digital currency, the digital euro, with a focus on privacy as a significant aspect.
• Executive board member Fabio Panetta stated that the central bank has no commercial interest in storing or monetizing user data.
• The launch of the digital euro aims to protect users against private stablecoins and other cryptocurrencies.

The executive of the European Central Bank (ECB), Fabio Panetta, believes that the digital euro will help protect consumer privacy and that cryptocurrencies like Bitcoin are “very dangerous animals.”

Euro digital will focus on privacy protection

Fabio Panetta, member of the executive board of the European Central Bank, stated that the digital euro would protect the eurozone from the “threat” of other cryptocurrencies that would undermine the bloc’s monetary sovereignty.

He added that the goal of the central bank’s digital currency project was combat the spread of other digital assets created by other countries and companies. Panetta said:

“If the central bank gets involved in digital payments, privacy will be better protected because we are not like private companies. We have no commercial interest in storing, managing or monetizing user data. “

Pointing to the stablecoin Diem, created by Facebook that would allow users to send money as fast as text messages, Panetta believes it could be a potential threat if the central bank does not offer users a digital means of payment.

The recent European Central Bank consultation on the digital euro concluded that the main concern surrounding the digital currency was that it would erode your privacy. Panetta explained that the ECB had tried ways to separate user identities from their payment details. He added:

“The payment will be made, but no one in the payment chain would have access to all the information.”

According to the Bank for International Settlements, nearly two-thirds of the world’s central banks are exploring the potential launch of digital currencies by conducting hands-on experiments.

Panetta concluded that a digital euro would lead to a fundamental change in the way payments and the financial system would work, highlighting the possibility of being “programmable” and allowing the automation of payments similar to the smart contracts that already exist in the crypto industry.

By the end of the year, Panetta said the central bank would complete its new supervisory framework for private digital assets and cryptocurrency providers.

According to the member of the executive board, cryptocurrencies like Bitcoin are “very dangerous animals” and are “used to a great extent for criminal activities”, which consume large amounts of energy.

While there is no responsible legal entity, regulating decentralized cryptocurrencies is extremely difficult.