An executive from Spanish bank BBVA has highlighted concerns about a potential digital euro and questioned what customer demand it would meet.
Talking at a European Banking Federation seminar, BBVA digital regulation team member Pablo Urbiola advised a ‘cautious and pragmatic approach’ on the potential introduction of a digital euro.
He also warned that the digital euro introduction would have to enable private players to develop related business models. The BBVA – alongside many other banks – has been participating in a number of pilot projects centred around the digital euro.
Urbiola said, “Although it is hard to argue that a digital euro is needed at the moment, there are good reasons for the European Central Bank (ECB) to explore the possible issuance of a digital currency, and to be ready to make such a move should the need arise in the future.”
“However, considering all the innovation that is taking place in the payments market, it is not clear which customer demands a digital euro could fulfil that may not be fulfilled by other initiatives.”
Urbiola said that if a digital euro is developed, the ECB should rely on public-private cooperation to help leverage the strength of all players.
He added, “It is essential that the general framework designed by the ECB is flexible enough, and that allows private players to develop business models in a competitive space”.
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