Deutsche Bundesbank president Joachim Nagel recently addressed the Eurosystem’s approach to CBDC payments, emphasizing the minimal data visibility and the inability to identify individuals. During his speech at the DZ Bank Capital Markets Conference 2024, Nagel stated that the Eurosystem would only have access to a limited set of data necessary for settlement purposes.

Privacy concerns were also highlighted by Nagel, who mentioned that financial institutions and payment service providers would not be allowed to use personal or transaction-related data for commercial use without explicit consent from users. However, access to this data would be permitted for compliance with anti-money laundering and counter-terrorism financing regulations, particularly for low-value offline transactions.

Addressing the concerns of banks regarding the digital euro, Nagel assured that necessary precautions would be taken to prevent structural disintermediation and reduce the impact on banks’ ability to provide credit. Setting low maximum amounts for CBDC holdings would help banks manage additional liquidity demands.

Despite doubts from some individuals about the necessity of a digital euro, Nagel expressed confidence in the benefits of economy digitization for both consumers and retailers. He emphasized the convenience of a single payment instrument that meets all requirements.

Meanwhile, the United States is proceeding cautiously with the potential launch of a CBDC. Federal Reserve Chair Jerome Powell stated that there is no immediate need for concern about a central bank digital currency, indicating that such developments are not imminent in the near future.

For more insights on CBDCs and the challenges they may face, Sweden’s central bank has also raised concerns about potential issues with offline CBDC payments.

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