Total anonymity will not be possible with the digital euro, according to an ECB official. The executive states that bitcoin and other digital currencies are “very dangerous animals”
Fabio Panetta, a member of the board of directors of the Central Bank of Europe (ECB), days ago sustained an interesting dialogue with journalist Martin Arnold days ago, in which he stated that all payments should be traceable to fight against money laundering and tax evasion.
The interview appeared on the website of the financial institution and the conversation circled the digital euro which is in its current research stage. The official thinks that it would be possible to make small transactions with the digital euro through anonymous procedures, but explains there is a risk that a larger payment will suffer a division and turn into many smaller ones.
Panetta says that total anonymity should receive a cautious consideration because there is a balance between ensuring total anonymity and ensuring compliance with fundamental regulations.
Citizens and their Stance on the Lack of Anonymity that surrounds the Digital Currency
The Italian economist adds that, once the digital euro comes, citizens will still be able to use cash, which grants and guarantees anonymity.
According to Panetta, citizens should not have to be afraid about the lack of complete anonymity with digital currency. He says that, with the help of technology, they intend to make people feel safer about how their data is being managed and, at the same time, to pave new paths to reconstruct a payment if the police desire to assess whether there was any illegal behavior.
Asked by Arnold about the possibility of governments spying on citizens and what they do with their money, through the digital euro transaction register, Panetta replied that people should just trust a public entity.
He said that all the actors will ensure that governance structures are in the right place to avoid and prevent any potential data abuse or disruption. He concluded the highlight by mentioning that European legislation is the most advanced legislation in the world when it comes to data protection.
The Digital Euro and Why No Stablecoin Should Start Trading in the Eurozone
“Eurozone residents who have shown a lot of interest in preserving their financial privacy need not worry just yet”. According to Panetta, the current preliminary phase could take at least two more years.
Regarding stablecoins, Panetta still refuses to classify these items as truly a stable financial instrument. The executive doubts the collateral to back up the value of these financial instruments and says that only a currency properly issued by central banks can show true stability.
The economist firmly shows his conviction on this statement even though the devaluation of fiat money, due, among other things, to the chance of being managed in an unlimited way, causes the purchasing power of its holders to fall down year after year, something that goes far from true stability.
By: Jenson Nuñez