Digital Euro Launch Hinges on Bank Impact Evaluation – Bank of Spain
The deputy governor of the Bank of Spain has emphasized the importance of assessing the digital euro's potential impact on the euro zone's banking system before reaching a final decision about its potential launch, according to her statements.
In a speech released on the official website of the Bank of Spain, Margarita Delgado pointed out that the digital euro could effectively address two significant trends in the market. The rising prevalence of digital payments underscores the necessity of ensuring citizens can continue utilizing central bank money within the digital realm.
Furthermore, given the growing numbers of digital assets, a digital euro could serve as a payment solution built on European infrastructure, capable of being widely accepted across the entire euro area.
While acknowledging these favorable aspects, Delgado cautioned against overlooking the potential downsides. She highlighted, “The introduction of a digital euro must not jeopardize the financial system’s stability.” Delgado went on to stress that “we must consider the factors that could affect the competitiveness and profitability of the banking institutions.”
Delgado emphasized the importance of maintaining financial stability throughout her discourse, asserting, “We are dedicated to striking the right balance between safeguarding our financial system and ensuring that the digital euro adequately addresses the users’ requirements.”
The European Central Bank is slated to decide on the continuation of its plans for the digital euro in the month of October.
Delgado underscored her belief in the coexistence of a digital euro and private payment solutions. This sentiment aligns with the legislative proposal of the European Commission, which positioned the digital euro as compliant with cash and not intended to replace it.
Delgado elaborated, “Our objective is to devise a fundamental payment method. Enriching it with value-added services rests with intermediaries, should they choose to do so. In reality, we anticipate that the digital euro will empower the private sector to develop novel pan-European payment and financial services, allowing for enhanced competition against non-European alternatives.
Ultimately, the digital euro should foster innovation, encourage competition, and bolster resilience within the European payments landscape.”