The Digital euro has been in talks for months, and recently, the European Central Bank executive Fabio Panetta commented on the creation and development of a central bank digital currency (CBDC) in Europe. Panetta claims that the digital euro’s success is a must, but it should not be so successful and popular that it puts the current monetary system in Europe at risk.
While a number of people in the country are actively investing in cryptocurrencies, the continent hasn’t released any special law regarding cryptocurrencies. Panetta is a senior-ranked official at the European Central Bank who claims that the cash is being undervalued to the increase in popularity of digital payments, especially after the Covid-19 crisis.
Although a number of nations have come up with their digital currencies and even the United Kingdom is looking to launch its own CBDC, there is no confirmation regarding a digital euro as of now.
European Central Bank to limit digital euro’s success?
The member of the Executive Board of the European Central Bank, Fabio Panetta, claims that the popularity of digital payments might make the digital euro more attractive to the citizens of the continent. However, Panetta also noted that the design of the digital euro should prevent it from becoming “so successful as a store of value that it crowds out private money and increases the risk of bank runs.”
In a speech at the Elcano Royal Institute in Madrid, Panetta provides new insight into the plans of the European Central Bank for the release of a CBDC.
“The ECB and the European Commission are together reviewing at the technical level a broad range of policy, legal, and design questions emerging from a possible introduction of a digital euro, including the role that legal tender status might play in achieving the desired network effects.”
Fabio Panetta in his speech
However, Panetta also noted that the digital euro must be accessible to all the citizens and very easy to store and make payments. It should be attractive to the users as well, supporting Europe’s autonomy in global payments. The bank seems to have planned a number of policies regarding the digital euro.