Public-Private Cooperation Needed for Issuing Digital Euro: BBVA Exec

An executive at a major Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) has said that The European Central Bank should rely on public-private cooperation for issuing a digital euro.

Public-Private Cooperation Needed for Digital Euro Issuance

The idea to introduce a digital euro is still at a conceptual stage. However, the project seems to have gathered momentum in recent months with many banks including BBVA participating in pilot projects.

At a seminar organised by the European Banking Federation, Pablo Urbiola, from BBVA’s Digital Regulation team raised concerns about the digital euro on what customer demand the digital currency is supposed to meet, saying:

“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.”

“Although it is hard to argue that a digital euro is needed at the moment, there are good reasons for the 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” he adds.

In addition, the executive said that the European Central Bank should rely on public-private cooperation “leveraging the strengths of all players” while adding that “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.”

ECB Should Address Challenges  of a Digital Currency

The executive emphasized that the European Central Bank should consider all the opportunities and risks of a digital euro and of the different design options.

Furthermore, the BBA executive emphasized that the ECB wants to address the various challenges associated with the digital euro:

“For instance, if a digital euro aims to respond to the decreasing use of cash, it should be designed as an electronic version of cash that is, simple, easy to use, with basic functionality.”

Hence, he believes it is“essential that the ECB continues to follow a cautious and pragmatic approach: monitoring the evolution of the market and the materialization of the scenarios it has identified.”