The introduction of digital (crypto)assets, as well as the underlying distributed ledger technology, has encouraged central banks throughout the world to contemplate digitising the monetary system and adopting central bank digital currencies (CBDCs). A digital euro issued by the European Central Bank (ECB) and made available to citizens and firms to make payments would be a very attractive instrument. However, concerns around competence, privacy, operational risk, cybersecurity, and financial stability risks cannot be ignored.
Would there be a large demand for a digital euro? How would the digital euro project impact the current financial system? Could CBDCs be the ‘holy grail’ of cross-border payments? How can the digital euro help address the risk of disintermediating banks? What is the role of the digital euro on strengthening the international role of the euro and how could it contribute to Europe’s ongoing quest for open strategic autonomy? What are the operational and processing challenges of a digital euro (e.g. the complexity of integration, mitigation from KYC to EID, and the use of different SEPA models across Member States)?
