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ECB Executive Board Member Fabio Panetta about Digital Euro & CBDC research

Fabio Panetta printed recent findings and remaining challenges whereas accentuation the requirement of a well-designed European CBDC.
ECB Executive Board Member Fabio Panetta about Digital Euro & CBDC research

European Central Bank executive board member Fabio Panetta provided an summary of the financial organisation’s current analysis on a retail central bank digital currency (CBDC) when he spoke at the IESE Business School Banking Initiative Conference on Technology and Finance on Friday. Panetta said the issuance of central bank digital currencies is

 

“likely to become a necessity”

 

but alarmet the whole market that

 

“they should not become a source of financial disruption that could impair the transmission of monetary policy in the euro area.”

 

A key to maintaining monetary stability throughout the introduction of digital currency, Panetta aforementioned, would be to grant industrial banks a task within the method. this could permit the banks to continue providing front-end services because the financial organisation benefitted from their expertise in client onboarding and Anti-Money Laundering (AML)

The Discussion Details

In January, a discussion paper issued by the us central bank FED foresaw an analogous role for banks. The paper noted the potential role of monetary intermediaries in protective client privacy. the ecu financial organisation, or ECB, has additionally addressed privacy problems.

 

Moreover, Panetta said,

 

“As the demand for cash weakens, issuing CBDCs could ensure that sovereign money continues to play its role in underpinning confidence in money and payments”

 

while support competitions between banks

 

“by reducing banks’ market power and improving contractual terms for customers.”

 

Panetta noted that analysis on the advanced potential interactions between CBDCs and financial policy illustrates the importance of careful CBDC style, he said:

 

“We need to solve the ‘CBDC trilemma’ according to which central banks’ objectives of payment efficiency, financial stability and price stability cannot all be achieved together,”

 

Image by Hans Braxmeier from Pixabay

Marcia

Marcia

Marcia is a real crypto fan, specialized in bitcoin and NFT news.

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