“Not necessarily a good idea”

The launch of the digital euro, the European Union’s CBDC, is planned for a few years. However, this issue is already triggering a debate in the committees of the country bloc, where the ideas regarding this centralized asset are the same.

During one meeting Four experts from the Economic Committee of the European Parliament commented on the digital currency that the European Central Bank will issue. These are mostly warning comments.

Ignazio Angeloni, an Italian economist, praised the European Central Bank’s progress in creating its CBDC amid the entry of fintech and technology companies into the payments sector “The playing field has changed.”

Although the specialist believes that the European CBDC environment is “good,” this does not necessarily mean that it is good that the introduction of a digital euro “is also a good idea.”

“However, the ECB plans to work for several years before making any decisions, so it will be time to carefully weigh all the pros and cons of CBDCs,” he said.

The ambitions for the digital euro have been watered down

Lawyer Vicky Van Eyck, managing director of Positive Money, also took part in the hearing in the European Parliament. In his opinion, the undisputed competition between bank deposits and the digital euro, “has seriously diluted the ambitions” for this CBDCalso as a digital means of payment.

According to Van Eyck, European users would not bother using CBDC for their payments because digital bank deposits are interest-bearing and can also be used for payments.

In addition, the banking sector has expressed criticism of the CBDC. and they have even suggested that this could lead to financial instability. A position that the European Central Bank and the European Commission “have chosen,” according to Van Eyck, who assures that these entities “have undermined the benefits of the digital euro project.”

For this reason, Van Eyck believes that the current digital euro proposal “It’s a missed opportunity.” “However, the EU legislature can still remedy this,” he said.

“The European Parliament and the European Council can continue to elect the members of the team to ensure that the digital euro has very similar benefits to the current cash, that it can be used by people and that they access it through public or non-public intermediaries can access. Profit,” he explained.

End of the banking crises

On the other hand, Miguel Fernández Ordóñez, former governor of the Bank of Spain, said: spoke out in favor of the EU CBDC.

In his opinion, a digital euro could surpass bank deposits. This is because CBDCs involve euros and deposits “It’s just a promise of payment in euros” In her opinion.

“And when banks cannot fulfill these promises, then crises arise,” said the banker, for whom the EU CBDC “solves the problems that we have with the current banking system, which is based on bank deposits.”

“The most important positive effect of the digital euro would be stability. “The digital euro would put an end to the problem of banking crises, these destructive crises that undermine the payment system,” he noted.

However, the CBDC, on the contrary, could cause problems for banks, which could suffer from the mass exodus of customers who choose the digital euro. This is what Marieke Van Berkel, Head of Retail Banking, Payments and Digitalization at the European Association of Cooperative Banks (EACB) says.

The expert said that the greater the number of customers leaving “The more difficult it becomes to finance loans”. “And the more customers you have, the bigger the problem becomes, as is the case with cooperative banks,” he explained.

For Van Berkel, it is important that the issuance of the digital euro is discussed, especially in view of the long-term implications and implications. in the diversity of the banking system and financial stability.