ECB’s Panetta on digital euro’s intermediaries and “programmable payments”

In a recent speech, Fabio Panetta, member of the Executive Board of the European Central Bank (ECB) discussed the digital euro.

He said that conditional (or programmable) payments are often mentioned as an innovative service – however, there is some confusion about the term, and this may raise concerns. The ECB’s definition of conditional payments is that people could decide to authorise an automatic payment where pre-defined conditions of their own choosing are met. For example: the payer could decide to set an automatic monthly payment in digital euro to pay their rent. But the payee would not face any limitations as to what they can do with this money they receive every month.

Panetta said that the ECB believed that supervised intermediaries, who are in direct contact with users, are best placed to identify use cases for conditional payments and any other advanced payment services.

“The digital euro would never be programmable money. The ECB would not set any limitations on where, when or to whom people can pay with a digital euro. That would be tantamount to a voucher. And central banks issue money, not vouchers,” he said.

The ECB is envisaging two options for conveniently using a digital euro:

  • Supervised intermediaries could integrate the digital euro into their own platforms. In this way, users could easily access the digital euro through the banking apps and interfaces they are already familiar with.
  • The Eurosystem is considering a new digital euro app, which would include only basic payment functionalities performed by intermediaries. The app would ensure that no matter where you travel in the euro area, the digital euro would always be recognised and you would be able to pay with it.

Read the full speech

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