The European Central Bank Flip-Flops on Programmable Digital Currency

The ECB appeared to roll back recent statements that the digital euro will be a programmable CBDC. Comments from the bank’s head suggested there would be limited controls.

A spokesperson for the ECB has told BeInCrypto that any upcoming Central Bank Digital Currency (CBDC, or “digital euro”) will not be programmable money. “The ECB would not set any limitations on where, when, or to whom people can pay with a digital euro,” the spokesperson stated in an email.

A programmable CBDC would allow limits to be set on how, when, and where people may spend a digital currency. In an interview posted online on April 6 with a prankster pretending to be President Zelenskyy of Ukraine, the head of the European Central Bank, Christine Lagarde, appeared to say the opposite. 

In the video, Lagarde said, “there will be control, you’re right. You’re completely right.” However, she clarified that it would be a “limited amount of control.” Lagarde added:

“We are considering whether for very small amounts, anything that is around 300, 400 euros, we could have a mechanism where there is zero control. But that could be dangerous.”

However, the ECB spokesperson has denied this is the case.

The spokesperson told BeInCrypto the bank would not be able to identify holders or users of digital euros. This would be done by splitting data between the central bank and digital euro distributors.

Lagarde had previously stated that the digital euro would not be programmable at a meeting at the Bank for International Settlements (BIS) Innovation Summit in March. She told an audience that the central bank would not be in charge of programming the CBDC. However, comments leaked from the prank interview appeared to show that the ECB had changed its mind.

What Is a Programmable CBDC?

A programmable CBDC would allow a central bank to embed specific rules or conditions within the digital currency itself. For example, it could be designed to expire automatically after a certain amount of time. The currency could also be designed for spending only at certain businesses or on certain types of goods or services.

The idea of programmable CBDCs has stirred up controversy within the cryptocurrency community. They are often viewed as an encroachment on personal liberties and a means for governments and central banks to conduct surveillance. Overstepping legal and ethical bounds.