This is because making a payment is about more than just exchanging money for goods and services: it is a form of social interaction made possible by money, which has been described as “the most universal and most efficient system of mutual trust ever devised”7. Finally, a digital euro would increase privacy in digital payments thanks to the involvement of the central bank, which – unlike private suppliers of payment services – has no commercial interests related to consumer data. Ensuring privacy is an essential element of modern democracies and part of our European values. Payments must also respect people’s right to privacy in the digital era, and the design of a digital euro would have to respect this principle. This is a core aspect we will look at – indeed, we have already started exploring possible ways of enhancing privacy.8 At the same time, payments in a digital euro – just like any form of payment – would have to respect the rules on countering money laundering, the financing of terrorism and tax evasion. This would enable public authorities to combat any illegal activity more effectively. To summarise, the digital euro would still be a euro, only in digital form. It would both shape and promote the digitalisation of payments, while reducing the associated risks. This would in turn support the ongoing digitalisation and modernisation of the European economy.9  Why might we need a digital euro? A digital euro would be critically important in a number of scenarios, which are analysed in our report.
10 ECB (2020), Study on the payment attitudes of consumers in the euro area (SPACE), forthcoming. 11 ECB (2020), Impact of the pandemic on cash trends (IMPACT), forthcoming, 12 Legal tender status implies that acceptance of euro banknotes and coins for payments is mandatory (unless  explicitly agreed otherwise, for example owing to a lack of change), legally recognised for repayment of a debt, and at face value, without additional fees (in contrast, for example, to credit cards, for which additional payment fees are allowed). See Article 128(1) of the Treaty on the Functioning of the European Union. 13 For example, TARGET Instant Payment Settlement (TIPS), managed by the Eurosystem, allows European  citizens to transfer funds in real time and around the clock, every single day of the year. In the design of a digital euro we will also look into the potential of distributed ledger technology. 14 See Bindseil, U. and Panetta, F., (2020), “Central bank digital currency remuneration in a world with low or  negative nominal interest rates”, VoxEU, October. 15 European Commission (2019), Standard Eurobarometer 92, December. 4/4  BIS central bankers' speeches