ECB execs respond to banks’ opposition to digital euro, point out priorities
The European Central Bank (ECB) has recently been producing a lot of informational material about the digital euro, mostly in brochures, FAQs and other accessible formats. As they do so, the banks' frustration with the overwhelming fear and cold reception of his innovation is beginning to show.
ECB officials, including board member Piero Cipollone, published a column on central bank issues on February 19 in two versions. In particular, they discuss the confusion banks are feeling in the wake of the Euro Central Bank's introduction of a digital currency (CBCC):
“Despite mitigation measures clearly included in the CBCC design, banking associations, bank-backed think tanks and academics continue to publish studies highlighting the risks associated with removing financial intermediaries from transactions.”
To prevent mass transfers from commercial bank accounts to digital euro wallets, the authors briefly describe several measures designed in the digital euro on the ECB blog. These design elements encourage the use of the digital euro for payments rather than investment, and the authors suggest that banks may compete to hold deposits by raising interest rates.
The authors present counterarguments to the claim that the introduction of the digital euro could cause an acute economy-wide banking crisis and that banks could lose deposits as a source of long-term monetary reform.
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Their argument about banknotes may be somewhat more original. “Bank-sponsored studies that constantly complain about the future size of the digital euro do not look at the real variable (central bank money in circulation),” they wrote.
Furthermore, central banks are not the biggest threat to the banking industry:
“Stablecoins, e-money institutions and other narrow banking constructs, some of which are backed by large technology companies with large customer bases, do not care about the role of banks in the economy.”
By focusing on CBCC deficiencies, banks “neglect the many other challenges they face in ensuring stable funding through deposits,” the authors conclude.
A longer, more technical version of the blog post is available on the VoxEU website.
Here we go…the ECB is trying to sell us a programmable centralized currency that has the potential to turn us into economic slaves. At first, of course, it will just be a cool app to make our lives easier. But if citizens buy into this, they are sowing the seeds of their own slavery.
— David Thunder (@davidjthunder) February 19, 2024
“There's a lot of conspiracy theory about this, you know, that Big Brother was suddenly going to decide what to buy and how much to limit,” ECB President Christine Lagarde said in a speech before a European Parliament committee in September. He said.
ECB In October, he announced that he was moving into the preparation phase of the Digital Euro project.
Cipollone's co-founders, Ulrike Bindseil and Jürgen Schaff, published a blog post titled “Bitcoin's Final Stand” on the ECB's website in November 2022.
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