The ECB has been actively creating informative materials to educate the public about the digital euro. These materials, such as brochures and FAQs, aim to address concerns and provide accessible information about the innovation. However, the bankers are becoming increasingly frustrated with the exaggerated fears and the lukewarm reception of the digital euro.
To address the issue of bank intermediation, ECB executives, including board member Piero Cipollone, published a column on Feb. 19. They discuss the potential confusion among banks regarding disintermediation that may arise from the introduction of a euro central bank digital currency (CBDC).
In their blog post on the ECB website, the authors briefly describe several measures implemented for the digital euro to prevent mass transfers of money from commercial bank accounts into digital euro wallets. These design elements aim to encourage the use of the digital euro for payments rather than investment. Additionally, the authors highlight that banks could compete to retain deposits by offering higher interest rates.
The authors also counter arguments claiming that the digital euro could lead to a banking crisis and that banks risk losing deposits as a long-term source of refinancing. They argue that complaints about future volumes of digital euro are misplaced, as they fail to consider the variable of central bank money in circulation. Furthermore, the authors note that central banks are not the primary threat to the banking industry. Banks should focus on addressing the various challenges they face to ensure stable funding through deposits.
For a more detailed and technical version of the blog post, interested readers can find it on the VoxEU website.
In a speech before a European Parliament committee in September, ECB president Christine Lagarde dismissed the conspiracy theories surrounding the digital euro. She emphasized that the idea of the ECB having complete control over individuals’ buying decisions is unfounded.
The ECB announced in October that it has entered the preparation phase of the digital euro project, indicating progress in its development.
Cipollone’s co-authors, Ulrich Bindseil and Jürgen Schaaf, also published a blog post on the ECB website in November 2022 titled “Bitcoin’s Last Stand.”
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