On the occasion of today’s European Commission proposal on the digital euro, Henrike Hahn, MEP (The Greens/EFA), Deputy Speaker of the German Delegation of the Greens/EFA, Substitute Member of the Economic and Monetary Affairs Committee and Shadow Rapporteur on the digital euro comments:
“With today's Commission proposal, we have taken a step forward in making the euro fit for the digital age. In Europe, we cannot just leave the digital payment space to private payment service providers, crypto providers or the digital currencies of third countries.
In the negotiations on the design of the digital euro, it is therefore all the more important that the digital euro - just like cash - becomes a true public good.
Therefore, I will work to ensure that:
- The use of public payment service providers and financial and digital inclusion measures are accessible to all.
- The use of the digital euro and related services is free of charge.
- Merchants are charged if necessary fair fees and payment service providers do not make disproportionate profits from the distribution of a public good as they do with current payment methods.
- The European Parliament and the Council should be fully involved in the definition of any holding limit, which should be only temporary and be set at a level that is strictly necessary to ensure financial stability.
The digital euro can play a key role in tackling digital and financial exclusion in Europe. I therefore welcome that the role of public payment service providers for the distribution of the digital euro is clearly recognised in the Commission proposal and that private payment service providers are obliged to offer digital inclusion support.
However, access to public payment service providers and inclusion offers should not be limited to people who do not wish to have a bank account or are at risk of digital exclusion. Instead, all digital euro users should be able to choose between a public and private intermediaries when using the digital euro.
I very much welcome that the Commission wants to make the digital euro free of charge. In the upcoming negotiations, I will take a close look to ensure that the list of free payment services enables the digital euro to be used as widely as possible.
It is also important to ensure that retail fees remain fair. The digital euro is a public good and therefore the remuneration of payment service providers should be aligned with the costs incurred, and not set at a level to insure profit making for the provision of basic digital euro services.
In order to make the digital euro a game changer and to bring true social and economic value, the introduction of a holding limit should be temporary, measured against the actual risk to financial stability and subject to review.
The introduction of the digital euro without a holding limit offers an opportunity to fundamentally improve the functioning of our monetary and banking system, for instance by creating incentives for banks to finally pay fair interest on savings accounts. The European Parliament should have a say in setting such a holding limit.
I see a merit in ensuring the full application of the existing anti-money laundering (AML) rules to digital euro online payments, while foreseeing a specific regime for the offline functionality of the digital euro, which should be aligned with the future rules for cash. We should take a close look at the technical features of the offline functionality to ensure that potentially higher AML risks are addressed appropriately.
We should also not completely rule out the distribution of the digital euro without intermediaries, which may become a possibility in the future.”
I would be happy to answer any further questions.