Which functionalities for the digital euro
On 14 July 2021 the ECB formally launched a project to evaluate and prepare for the possible issuance of a digital euro which should:
- Allow for fully anonymous payments to protect privacy, while respecting anti-money laundering rules;
- Allow for offline payments;
- Allow for instant credit transfers and direct debits;
- Be programmable and allow for ‘smart contracts’ for advanced use cases in industry and commerce;
- Ensure financial inclusion (meaning potentially also usable by the non-banked and those without mobile phones);
- Be as convenient to use as existing private sector solutions;
- Include card, mobile, and internet/desktop access.
In this paper Assenmacher and Bindseil explain the issues the project will address namely the role of commercial banks, the impact of the digital euro on the effectiveness of monetary policy as well as financial stability.
The Eurosystem’s digital euro project: Preparing for a digital future
Authors: Katrin Assenmacher, Ulrich Bindseil
From: ECB
Pages: 120-126
The digital euro and the banking union
The introduction of the digital euro would de facto bring about banking union. But this would be on the books of the ECB. If banks are to participate in banking union, there must be a Single Euro Deposit Guarantee Scheme
The digital euro – a different route to banking union?
By: Thomas Huertas – SAFE Senior Policy Fellow
The digital euro and private money
[Paul Tucker] was careful to avoid either defending or undermining the status quo in which banks are the main providers of private money, saying that he was open to seeing other business models for private money creation — such as stablecoins and narrow banks — develop, even if this meant marginalising banks from their present role.
Tucker: Five years is too long for digital euro debate
By: Lewis McLellan – OMFIF
