At this year’s Digital Euro Summit, the ECB is proud of the current progress with regard to the e-euro.
Today took place this year’s Digital Euro Summit of the German digital association Bitkom. Representatives from politics, science and business came together and discussed, among other things, the future of the “E-Euro”. It was about the question of possible use cases and driving forces for the implementation of an EU-wide CBDC. Jürgen Schaaf, who works at the European Central Bank (ECB) as a consultant in the area of “Market Infrastructure and Payments”, was there. During the discussion, he outlined the monetary authority’s motivation to put an e-euro into circulation. As a reminder: the ECB officially announced in mid-July that it would initiate an investigation phase into the e-euro. This will start on October 1st and will evaluate for 24 months to what extent the introduction of digital central bank money in the euro area is worthwhile.
In his contribution, Schaaf broke the motives down to three core considerations. First of all, the e-euro would have positive effects on digitization within the association of states. Furthermore, a steady decline in cash payments was noted, especially during the pandemic. In Scandinavia, for example, according to the ECB, only just under 4 percent of all citizens are currently processing their daily transactions in cash. Last but not least, an EU-wide digital central bank currency is also important insofar as it can be used to counter private projects such as Facebook’s Diem.
ECB on the e-euro: “We cannot conduct experiments”
In general, the ECB initially sees the e-euro as a retail solution. In this context, Schaaf preached the central bank’s core mantra that a digital euro should not replace cash, only supplement it. A wholesale solution has not yet been planned.
We see the e-euro as a service for the public and want to get the private sector on board as well. Of course, we are aware that many of the innovative solutions come from the private sector and not from us.
Jürgen Schaaf, European Central Bank
Another point of criticism, which was also expressed at the digital event, concerned the speed with which the ECB was researching the e-euro. For example, Jens Hachmeister from Deutsche Börse said:
We shouldn’t wait to finish everything. We support the path taken by the ECB, but in the meantime we should also think about other interim solutions.
Jens Hachmeister, Deutsche Börse
The representative of the ECB replied:
All over the world there is currently an evaluation process. About 80 percent of all central banks are investigating the CBDC solution. We are actually not the slowest. We are also not like the central bank of the Bahamas or the central bank of El Salvador, where the monetary system did not work properly and they have responded to it with very curious solutions. We cannot enter into such experiments. When we present our solution, it has to be safe and healthy.
Jürgen Schaaf, European Central Bank