EU’s Leaked Digital Euro Bill Outlaws Interest, Large Holdings, Programmability

Paying interest on or surcharges for using a digital euro would be banned under a draft law seen by CoinDesk, and set to be proposed by the European Commission on June 28.

The proposed central bank digital currency (CBDC) would have to be available for cash-style offline payments from day one, and users shouldn’t be able to program it to limit onward use, the leaked bill said.

“The digital euro shall be available for both online and offline digital euro payment transactions as of the first issuance of the digital euro,” said the legal text viewed by CoinDesk. The level of privacy for offline, face-to-face use should be “comparable” to withdrawing banknotes at an ATM, it said.

For offline transactions, “neither the European Central Bank nor the payment services providers will gain access to personal transaction data,” according to the document, though banks who distribute the digital euro can send financial crime authorities details of how accounts are funded if they suspect money laundering.

Privacy emerged as the number one area of public concern in a 2021 ECB survey, with precedents from China leading many to worry it could lead to large-scale state snooping.