The European Central Bank published this week the results of a public consultation on a digital euro. Half of the respondents, most of whom are German men, said that blockchain would resolve counterfeiting and technical glitches, and most want a digital euro that respects their privacy.
The results aren’t binding, but still “provide valuable input to the Eurosystem’s reflections on a digital euro.”
During the three-month consultation, which opened in October 2020, 8,221 respondents— 6% of whom are professionals (read: lobbyists) and the other 94% mere citizens—weighed in on their preferences for the design of a digital euro.
Blockchain for the digital euro?
A digital euro would be a central bank digital currency (CBDC)—a digital version of the ECB’s fiat currency. Governments are interested in CBDC because they make it easier to analyze financial transactions and cheaper to disburse money in times of crisis. CBDCs aren’t necessarily based on blockchain, but they can be.
Despite much hubbub, few central banks have launched CBDCs. Small economies, like Cambodia and Bermuda, have launched them. China, currently trialling its own digital yuan, leads the CBDC game among major economies.
But such countries are way ahead of the pack. Most developed economies, like Japan, the US and many European countries, are cautiously exploring the benefits of even testing it. Hence why the ECB’s still asking the public what kind of digital euro they would like to use.
Half of the citizens who responded want the digital euro to run on a blockchain, and half also demand “a limited or no role for intermediaries.” A fifth of the sample mentioned cryptography.
Citizens want a CBDC that doesn’t require constant connection to the internet, and one that’s focused on privacy, even that means sacrificing “innovative features” (undefined in the consultation). Most said that modern technology is sufficient for a digital euro.
“It is worth noting that citizens refer to blockchain much more often than professionals, even those from the tech industry,” the report said, adding that citizens mention Bitcoin much more.
“But a digital euro would be very different in terms of stability of value, data protection, transaction costs and public protection,” the ECB said.
Tech bros chime in
Despite mustering 8,221 responses, the survey was far from representative of the European population. That’s because public consultations are open to anyone and, unlike surveys, make no attempts at diversity. 90% of respondents were men and a third work in tech.
And although the EU has 27 member countries, respondents from Germany contributed half of all responses to the public consultation. Those from Italy and France followed by some distance with 15% and 11%, respectively.
So when can Europe expect its digital euro, if ever? In about five years, according to what Fabio Panetta, an ECB executive board member, told Wednesday the members of the European Parliament.