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ECB responds to the banking industry’s concerns about the digital euro.

The European Central Bank stresses that the digital euro will work with banking institutions to promote financial stability and facilitate the flow of payments.

Date: 2024-02-20 Author: Łukasz Michałek
ECB responds to the banking industry’s concerns about the digital euro.

In response to financial institutions’ concerns about the role of the central bank’s digital currency (CBDC), the European Central Bank (ECB) is seeking to respond immediately. “The digital euro will be designed as a means of payment and not as an investment currency,” the ECB report said.

ECB Executive Board members Piero Cipollone, Ulrich Bindseil and Jürgen Schaaf expressed the banks’ concerns about disintermediation. The report notes that the digital euro is not intended to replace banks.

“The digital euro could help banks and European payment service providers. Payment service providers will be the main point of contact and will distribute the digital euro.”- explains the bank employee.

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In addition, she stressed that there would be models for fair remuneration for suppliers distributing digital euros. There would also be digital euro storage restrictions to maintain financial stability.

In addition, the central bank noted that financing institutions may face greater risks than the digital euro when it comes to new disruptive payment methods such as stablecoins and e-money institutions.

In this way, banks could circumvent other problems they face, the ECB added. Banks should offer attractive products and services to customers, instead of limiting themselves to “new and powerful” private competitors. In this way, customers could keep their money, he added.

Board members also revealed that the ECB is working to create a digital euro. It will continue to refine design choices, consider potential risks and optimize benefits.

Moreover, the ECB is “serious” about concerns about bank funding, suggesting asset restrictions, access and lack of remuneration.

“A digital euro would harmonize European standards, allowing payment service providers to expand their services abroad to cover the entire eurozone.”

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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