A digital euro would not be used for commercial purposes, ECB’s Lagarde says

A digital euro issued by the European Central Bank (ECB) “will not be used for commercial purposes,” according to Christine Lagarde, the central bank’s president.

The ECB provides “the guarantee that those payments will not be exploited for commercial purposes,” Lagarde said on Wednesday at a conference in Frankfurt when talking about the possibilities of a central bank digital currency (CBDC) . “This is not the business of a central bank.”

The ECB president referred back to a survey from January 2021, which was rolled out ahead of launching its digital euro investigation, that privacy ranked at the top of European respondents’ list of features expected from a digital currency.

Lagarde said that a digital euro is essentially a bank note “with a little less anonymity,” but she promised that — unlike companies that sell data collected through payments — a European CBDC would protect citizens. 

Any U.S. CBDC would also have a focus on privacy, if adopted, Jerome Powell, the Federal Reserve chairman, said on Tuesday.

Privacy-protection is one of the four CBDC characteristics Powell named, alongside intermediated, identity-verified and interoperable. However, the U.S. central bank has “not decided to proceed” with a CBDC for now.

The ECB’s digital euro prototype, on the other hand, is in the works. The central bank announced the five partner companies that will help build the trial payment system earlier this month. The evaluation and results of the project are expected in March 2023.

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