• The Spanish Institute of Banking and Finance has held a new session entitled “Digital Euro: from purposes to reality”
• The experts agreed on the importance of minimizing risks to financial stability and clearly explaining the potential advantages of its use for citizens
• The video is available at the following link
The Spanish Institute of Banking and Finance has held a ‘Banking Lab’ session entitled “Digital Euro: from purposes to reality,” which was moderated by the Director General of the Spanish Banking Association (AEB), María Abascal, and featured the participation of Carlos Cuerpo, Secretary General of the Treasury and International Financing; Juan Ayuso, Director General of Operations, Markets and Payment Systems at the Bank of Spain; María Ruiz Andújar, Head of Strategy and Business Development for Global Cards and Digital Solutions at Banco Santander; and Santiago Fernández de Lis, Head of Regulation at BBVA.
The speakers agreed that the main challenges for the digital euro will be privacy, reliability, usability, leveraging existing payment infrastructures, added value for citizens, as well as a proper explanation of the advantages it offers. The speakers emphasized that the digital euro is intended to complement cash, not replace it. “The digital euro is the adaptation of cash to modern times,” in the words of Juan Ayuso. Carlos Cuerpo, for his part, stated that the design of the digital euro “cannot put financial stability at risk,” in agreement with the other speakers.
The Secretary General of the Treasury and International Financing summarized the three key ideas in the proposal presented by the European Commission: “Universality versus proportionality regarding the use of the euro,” “flexibility or usability while ensuring financial stability,” as well as “privacy, which is one of the most valued characteristics of cash.”
When asked about possible implementation timelines, the Director General of Operations, Markets and Payment Systems at the Bank of Spain indicated that the decision to issue a digital euro “has not been made and will not be made in either the short or medium term.” Juan Ayuso stated that the project is in the first research phase, which began in October 2021 and is expected to conclude in October of this year. Then, if the ECB Council approves it, the “preparation” phase would begin. It should be noted that projects of similar magnitude have had an implementation period of between 5 and 6 years. “Right now, we are deciding on the options that need to be on the table for when decisions have to be made,” he emphasized. He also stressed that “the digital euro is being designed as a means of payment, not as a savings vehicle or store of value.”
In this regard, Santiago Fernández de Lis recalled the importance of “achieving a sound design for the digital euro project, avoiding a structural displacement of deposits and potential concerns about certain segments of the financial system.” In his opinion, this last point “relates to the need to set limits and ensure that the digital euro is a means of payment and not a store of value.” BBVA’s Head of Regulation emphasized that the digital euro “should have a clear purpose, offer tangible benefits, and respond to a market need,” in addition to “minimizing risks to financial stability.”
María Ruiz Andújar, Head of Strategy and Business Development for Global Cards and Digital Solutions at Banco Santander, advocated for “focusing on those use cases that provide value to the user and are not currently covered,” especially in cross-border payments, as well as “leveraging existing infrastructures.”
Finally, the participants in the ‘Banking Lab’ agreed on the need to develop an appropriate narrative for citizens. “We must be able to properly convey the advantages, as well as the added value of the digital euro compared to existing options,” stated Carlos Cuerpo. “User interaction is highly relevant,” said María Ruiz Andújar, who advocated for making an effort from the banking institutions.
The session featured the participation of the Director General of Bizum, Ángel Nigorra, who highlighted as fundamental challenges “the heterogeneity of different European countries”; the explanation to users, so that “they understand how the digital euro and other means of payment coexist”; as well as leveraging existing payment infrastructures, with the aim of ensuring greater efficiency.
