ECB Would Put Private Banks in Charge of Users’ Digital Euro Wallets

Must read

Joe Biden pays tribute to victims of California mass shootings: ‘As a nation, we have to be there for them’

 President Joe Biden led a moment of silence at the White House on Thursday in honor of the victims of separate shootings that killed 11 people...

FDA pushes to make COVID-19 vaccinations easier. At the top of the list: One annual booster instead of two

The U.S. is poised to make COVID-19 vaccinations more like a yearly flu shot, a major shift in strategy despite a long list of...

Hasbro to cut 1,000 jobs as the pandemic-era toy-buying boom cools now that kids are back in school

Hasbro, one of the world’s largest toymakers, said it would cut 15% of its workforce, or about 1,000 jobs, after a disappointing holiday shopping...

A chemical plant’s polluting poisoned a generation of children in a small town. The settlement that the state just made has residents up in...

In hindsight, it’s clear that something was very wrong in this suburban town at the Jersey Shore, where many people worked at or lived...

Cryptocurrency 19 minutes ago (Dec 21, 2022 01:00PM ET)

ECB Would Put Private Banks in Charge of Users’ Digital Euro Wallets ECB Would Put Private Banks in Charge of Users’ Digital Euro Wallets

  • ECB says Eurosystem would be in charge of issuing digital euros.
  • Private intermediaries would distribute these euros to the users, and manage transactions in their accounts.
  • Banks would also perform KYC and anti-money laundering checks.

Europe is gearing towards releasing its own digital euro. However, the CBDC is unlikely to get much attention in the crypto space. As it turns out, there is no place for self-custody in ECB’s vision.

On Wednesday, The European Central Bank (ECB) released its second progress report on its investigation of the digital euro. The proposed digital currency would be the central bank digital currency (CBDC) of the eurozone.

The ECB explained its vision of how the digital euro would work. The “Eurosystem,” which comprises the ECB and the central banks of the member states, would be in charge of the issuance and the settlement of the digital euro.

Europe’s monetary authority says its role in processing user data would be minimal. “The Eurosystem would not be able to infer how much digital euro any individual end user holds nor to infer end users’ payment patterns,” ECB says.

On the other hand, distributing these digital euros to users would be in the hands of private entities. Intermediaries such as “credit institutions and payment service providers,” would handle all user-facing transactions.

As such, they would have a similar role to banks in the current system. Intermediaries would be in charge of “opening digital euro accounts or wallets and associated payment operations,” the report writes.

They would be in charge of “opening digital euro accounts or wallets and associated payment operations,” the report writes. In addition, intermediaries would be responsible for know-your-customer (KYC) and anti-money laundering checks.

Digital Euro Launch by 2023?

ECB, together with the central banks of the countries in the eurozone, launched an investigation into the digital euro back in October 2021.

The investigation is expected to be concluded by the end of 2022. If all goes according to plan, Eurosystem could reach a decision as soon as autumn, 2023. At that point, the ECB could start a full-scale launch of the digital currency.

ECB is just one of the hundreds of central banks globally that are currently exploring a digital currency. Other countries, including China and Canada, have already launched pilot projects. China went so far as to airdrop $30 million in digital to boost adoption.

On the Flipside

  • Central bank digital currencies raise concerns over privacy and data protection. Moreover, critics say that the assets give too much control to the central banks over the economy.
  • The digital euro is unlikely to interest crypto investors and traders, who favor self-custody.

Why You Should Care

Eurozone is one of the largest economies in the world, with more than 400 million people. A digital euro could set trends on how other countries tackle the issue of CBDCs in the future.

You may also like:

CBDC Explained: Everything You Need to Know About Central Bank Digital Currency

CBDCs Simply Don’t Work — For Anything

See original on DailyCoin

More articles

Latest article

Joe Biden pays tribute to victims of California mass shootings: ‘As a nation, we have to be there for them’

 President Joe Biden led a moment of silence at the White House on Thursday in honor of the victims of separate shootings that killed 11 people...

FDA pushes to make COVID-19 vaccinations easier. At the top of the list: One annual booster instead of two

The U.S. is poised to make COVID-19 vaccinations more like a yearly flu shot, a major shift in strategy despite a long list of...

Hasbro to cut 1,000 jobs as the pandemic-era toy-buying boom cools now that kids are back in school

Hasbro, one of the world’s largest toymakers, said it would cut 15% of its workforce, or about 1,000 jobs, after a disappointing holiday shopping...

A chemical plant’s polluting poisoned a generation of children in a small town. The settlement that the state just made has residents up in...

In hindsight, it’s clear that something was very wrong in this suburban town at the Jersey Shore, where many people worked at or lived...

Health effects of cannabis products are too uncertain for regulating the fast-growing market like food or supplements, FDA says

The Food and Drug Administration said Thursday there are too many unknowns about CBD products to regulate them as foods or supplements under the...