Flavio Panetta, director of the European Central Bank (ECB), confirmed that the digital euro will not be programmable money. In other words, the central bank digital currency (CBDC) will not include restrictions on how it can be used. Users can make conditional payments: a payment is only made if an event occurs, but that is under the control of the user. Panetta spoke today during a presentation at the European Parliament.

Panetta said: “Let me be clear: the digital euro would never be programmable money. The ECB would not place any limitations on where, when or to whom people can pay with a digital euro. That would equate to a voucher. And central banks issue money, you’re not worth it.” By contrast, other governments such as Singapore and Argentina are exploring programmable money, especially for government-subsidized programs.

Last week the Eurogroup, made up of the Eurozone finance ministers, stated that they do not want to see a programmable digital euro with any restrictions on its use.

The ECB head also reiterated the need for comprehensive privacy for a digital euro, which is why the central bank does not see detailed transaction data. However, Panetta said it was up to Parliament to decide on the balance between privacy and the anti-money laundering requirement. He said the privacy provided by the offline digital euro currently being designed is “close to that of cash.”

Digital euro roadmap

Panetta outlined the current work agenda, mentioning the need to design a compensation model. This is a challenging issue because intermediaries need to be incentivized to promote the digital euro. At the same time, he mentioned that some features, like paying someone else, should be free, like it is today with cash. Elsewhere, he claimed that all payments would be free.

“In addition to the basic services, individuals can choose to make use of any additional services offered by participating intermediaries on a voluntary basis,” Panetta said.

Other work agenda items have already been released, such as exploring design options, completing prototyping, and doing market research with technology providers on technology options.

He reiterated that a decision in the fall on whether or not to move to the realization phase is not the final decision on whether to issue a digital euro.