- A high-ranking ECB executive has criticized PayPal’s stablecoin, stating that private companies shouldn’t control essential payment services
- Fabio Panetta recently discussed progress on a digital Euro, emphasizing the need for inclusive, free, and privacy-focused digital payment options
- Panetta raised concerns about private companies like PayPal dominating the digital payments market and its impact on the financial sector, highlighting the ongoing battle between private firms and governments
A high-ranking European Central Bank (ECB) executive has criticised PayPal’s new stablecoin, saying that private companies shouldn’t be issuing payment services that should be accessible to all. In a series of comments reminiscent of Meta’s attempt to launch the Libra stablecoin in 2019 under its Facebook brand, ECB Executive Board member Fabio Panetta said that profit-driven companies shouldn’t be in charge of such a monetary system while also announcing that the bank was nearing the end of its research on a potential digital Euro.
“Considerable Progress” Made on Digital Euro
Panetta spoke this week at the Committee on Economic and Monetary Affairs of the European Parliament, where he commented on the progress being made by the bank in terms of a Central Bank Digital Currency (CBDC) and criticized the potential for private companies such as Paypal to operate a similar system.
Panetta said during his speech that “considerable progress” had been made since the first hearing on a potential digital Euro in 2020, with the committee working towards “designing an inclusive, truly European digital means of payment that can meet people’s needs and preferences.” He also added what he envisioned as the core principles of a digital Euro:
The publication of the proposals was a landmark first step. It will now be up to the European legislators to shape the proposals and ensure that a digital euro would replicate key characteristics of cash in the digital sphere. It would do so by offering a means of electronic payment that is available to everyone, everywhere, free of charge, while guaranteeing the highest level of privacy in digital payments. And it could also be used offline.
Government Good, Private Enterprise Bad
While Panetta talked up the potential of a CBDC, he criticized the actions of private companies like PayPal, saying that the delays in launching a CBDC have led to “potentially dominant private actors in the digital payments market [having a] strong impact on the financial sector”. This, he added, was not in the interests of the general public:
Private providers of payment services, including PayPal, have no incentive to limit the take-up of their stablecoins or the range of services they provide. Quite the opposite: their objective is to expand their customer base and gain market share.
With the battle between private companies and governments over digital payments hotting up, the next few years promise to be very interesting indeed.
