In a recent revelation, a spokesperson for the European Central Bank (ECB) has commented on the upcoming digital Euro. The ECB spokesperson wrote to a media house in an email that the upcoming European central bank digital currency (CBDC) will not be programmable money.
A programmable CBDC has a feature that allows the particular central bank to embed specific rules or conditions within the digital currency itself. For instance, the CBDC could be designed to expire automatically after a certain amount of time.
In addition, the currency could also be designed for spending only at certain businesses or on certain types of goods or services which clearly highlights the level of authoritarian hold over people’s money.
The spokesperson clearly denied the claims and concerns that were spread in the market regarding the European CBDC. As stated in the mail:
The ECB would not set any limitations on where, when, or to whom people can pay with a digital Euro.
It is important to note how the programmable CBDC became such an important topic of discussion and concern in the European continent. On April 6, an interview of the head of the European Central Bank, Christine Lagarde with a prankster pretending to be Volodymyr Zelenskyy, president of Ukraine, started taking rounds on Twitter.
In the interview posted online the ECB head appeared to say the opposite of what has been claimed in the mail. In the video, Lagarde could be heard saying, “there will be control, you’re right. You’re completely right.” However, she clarified that it would be a “limited amount of control.” She added:
We are considering whether for very small amounts, anything that is around 300, 400 euros, we could have a mechanism where there is zero control. But that could be dangerous.
However, the ECB spokesperson has completely denied this is the case and said that the bank would not be able to identify holders or users of digital Euros. This would be done by splitting data between the central bank and digital Euro distributors.
Nonetheless, at a meeting at the Bank for International Settlements (BIS) Innovation Summit in March, Lagarde had stated that the digital Euro would not be programmable. She told the audience that the central bank would not be in charge of programming the CBDC. However, comments leaked from the prank interview appeared to show that the ECB had changed its mind.
The concept of programmable CBDCs has fueled controversy within the crypto sector as they are viewed as an intrusion on personal liberties and a means for governments and central banks to conduct surveillance. Hence, the overstepping of legal and ethical bounds.
Notably, the ECB head has often made public comments regarding the upcoming digital Euro. A few days back, she said that the central banks need to match pace with the advancing technology. She added that the central banks might lose their relevance in the future if they fail to keep up with the increasing CBDC fame.
While the fame of CBDCs has been increasing, it is important to note that not all countries are on the same page as the concerns regarding privacy are increasing. Currently, the government and the Federal Reserve in the United States are under immense scrutiny regarding privacy in their upcoming digital Dollar. Interestingly, now the issue seems to be bipartisan as the Democrat lawmakers have also started stepping in despite the imminent divide in political ideologies.