Fabio Panetta, member of the ECB’s board of directors, spoke about the stable corners and the work on the digital euro.
He identified 4 main areas of work: resilience of the TIPS system, interoperability, electronic identity and user experience.
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Saturday 28 November – Fabio Panetta, member of the board of the European Central Bank (ECB), spoke about the stable corners and the work on the digital euro during a speech at the German Federal Bank.
4 lines of research for the digital euro
Mr. Panetta chairs the European Central Bank Cryptonics Task Force (CBDC).
He said the ECB and national central banks are exploring 4 axes.
Resilience of the TIPS instant payment system
The first is to see if the central bank’s settlement system called Target Instant Payment Settlement (TIPS) could support this service with hundreds of millions of customers. Currently, only eligible payment providers access TIPS directly when settlement requires central bank money.
Secondly, interoperability between centralised systems and distributed ledger technology (DLT) will be explored. For companies, one of the main requirements of a CBDC is to be able to settle transactions instantaneously on a Ledger.
This leads to the third area of investigation, the use of a „payment blockchain with electronic identity. »
The user experience
And finally, the ECB is also exploring arrangements for offline transactions that ensure privacy protection. The aim is to study the user experience.
Stable corners threaten privacy
The banker stressed that the purpose of the digital euro is to make payments, not to build up a store of value or an investment. He described it as the „raw material“ for private intermediaries offering customer-oriented payment solutions.
On this point, Mr Panetta once again underlined the potential threat to monetary sovereignty posed by the stable corners. But he went on to say that „the risks are not imminent“. This is despite recent news that Facebook plans to launch its dollar-backed Stablecoin in January.