FRANKFURT, Germany--Euro zone citizens expect the European Central Bank's proposed digital euro to be private, safe and cheap, a survey showed on Wednesday, as the ECB warned that any launch was still several years away.
The ECB is studying an electronic form of cash to complement banknotes and coins in a bid to stem competition from cryptocurrencies such as Bitcoin, Tether and Facebook’s proposed Diem.
An ECB consultation showed that privacy, a key feature of cash that some fear will get lost when switching to an electronic means of payment, was the number one priority for both private individuals and professionals. "For the participants in the public consultation, the most important features of a digital euro are privacy, security and broad usability," ECB board member Fabio Panetta told members of the European Parliament.
The ECB will decide in the coming months whether to launch a two-year analysis of the digital euro project.
Panetta said this would then be followed by "several years" of implementation before a final decision is made on whether or not to launch a digital currency. This could take five years in total, Panetta added.
The consultation was open to anyone and has no statistical value. The ECB did not ask if participants wanted a digital euro at all.
A digital euro would give holders a direct claim on the ECB, making it safer than an account held at a commercial bank or a digital wallet. This has raised some concerns, particularly by Germany's Bundesbank, that people at times of crisis would convert their savings into digital euros, exacerbating bank runs or even upending the financial sector’s business model altogether.
The ECB consultation showed that half of respondents were in favour of introducing a cap on how many digital euros every citizen can own or a tiered remuneration whereby balances above a certain threshold are penalised.
Two thirds of respondents said the electronic cash should be offered by private-sector intermediaries and integrated in the existing payment system and a quarter also wanted it offered as a “smart card” or phone app so that it can be spent offline.
Other central banks around the world are also working on similar projects, with China already running pilot programmes.
