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Defending the Digital Euro: Cipollone's Bid for ECB Role

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Oct 10, 2023 at 09:06 am

Comments made during a parliamentary hearing indicate that there will be no deviation from the course of digital currency once Fabio Panetta steps down from his position at the European Central Bank (ECB) in November.

Piero Cipollone staunchly advocated for the introduction of a digital euro during a hearing with lawmakers on Monday. Cipollone, the current deputy governor of the Bank of Italy since 2020, is the sole contender to take over from the crypto-skeptical Fabio Panetta on the ECB's executive board when he steps down in November. Cipollone's statements on Monday imply a continuation of the existing ECB digital currency policies.

He emphasized that a digital euro would:

 "strengthen the ability to transact with public currency across Europe using technology and infrastructure that is rooted in Europe." 

He assured members of the European Parliament’s Economic and Monetary Affairs Committee that it would offer offline functionality, accessibility, and robust privacy protection.

Cipollone's eight-year tenure has already received approval from eurozone finance ministers and the ECB itself, making his appointment to the position nearly certain. Additionally, lawmakers showed strong support for his candidacy in a non-binding vote, with a 30-3 majority shortly after the debate.

Panetta has previously criticized private cryptocurrencies, labeling them as profit-driven Ponzi schemes. He has also spearheaded ECB efforts on a digital euro, despite significant reservations from lawmakers about the benefits of the project for retail users.

Responding to an earlier questionnaire from lawmakers, Cipollone acknowledged that blockchain innovations come with "significant risks." However, he suggested that the challenges associated with a central bank digital currency (CBDC) in terms of financial stability and lending could be managed by implementing measures such as imposing holding limits on citizens.

In a recent letter reviewed by Bitsday, a coalition of EU lawmakers from various parties urged the ECB to postpone any decisions regarding a retail CBDC until a consensus on legal constraints is reached, particularly in contentious areas like privacy.

Read more: Argentinian CBDC Proposal and Election Dynamics

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