- Fabio Panetta, Executive Board member of the ECB, identified the digital euro as one of the bank’s four priorities.
- According to Panetta, the digital euro will be essential to meet consumer demand and maintain Europe’s sovereignty.
- He praised the proposed CBDC as a “simple, cost-free, risk-free and reliable” pan-Eurozone means of payment.
Fabio Panetta, member of the board of directors of the European Central Bank (ECB), hailed the digital euro project as “a simple, cost-free, risk-free and reliable digital means of payment” that would be universally accepted in the euro area. Speaking in Frankfurt on 22 October, Panetta named the digital euro as one of the four key strategies that the ECB will adopt in the future.
These strategies, which he said respond to the changing payments landscape in Europe, include the continued provision of cash, the development of the pan-European retail payments infrastructure, uniform oversight of electronic payments technology and the digital euro.
(Wire) Central banks are adapting their policies to ensure that payments remain efficient and inclusive, said board member Fabio Panetta. Authorities must be ready to respond to the ongoing transformation of European payments.
European Central Bank moves towards adoption of CBDCs
Panetta made these comments during an opening speech at the ECB conference entitled “A New Horizon for Pan-European Payments and the Digital Euro”.
Giving an overview of the current transition of digital payments in Europe, Panetta revealed that cash transactions had increased from 54% of the total transaction value in 2016 to 48% in 2019.
It also revealed that over the same period, cashless transactions increased from 19% to 24% in volume and from 39% to 41% in value. These changes, he said, are part of a growing body of evidence suggesting that Europe needs a new payment strategy for the future, with no cost and no risk to consumers.
In his view, the growing importance of cashless transactions, driven by card payments in the wake of the COVID-19 pandemic, highlights the need for card payment systems that interact seamlessly across borders. In this context, Panetta believes that the Digital Euro, a Central Bank (CBDC) digital currency proposal or BinBot to be issued by the ECB, will play a key role.
Panetta’s comments reflect the thoughts expressed recently by a number of senior ECB officials.
BeInCrypto reported in September that ECB President Christine Lagarde described the digital euro as a potential complement to cash. Speaking to the Franco-German Assembly, Lagarde suggested that the CBDC could facilitate the emergence of a European “digital single market”.
Panetta’s word of caution
Panetta made a point of stressing that the journey towards the digital Euro is not yet over. He pointed out that while this would offer several advantages, it could also pose challenges involving cybersecurity and unforeseen consequences for monetary policy, banks and the financial stability of the Eurozone.
Describing the steps the ECB is taking to mitigate potential risks, Panetta said:
“As the issuer of our currency, the Eurosystem is carefully considering the economic, technological, societal and strategic implications of the possible issuance of a digital euro. We have recently published our report on the digital euro and launched a public consultation. We will carefully consider the feedback we receive, so that if and when developments around us make it necessary, we will be ready to issue a digital euro that meets the needs of Europeans”.