European payment system: Considerations on issuing a digital euro
The European Banking Federation (EBF), integrated by the national banking associations from across Europe, released this paper analyzing potential implications of the issuance of a Central Bank Digital Euro in the European payments landscape, and providing some recommendations on its implementation and final design features, to be taken into account in the “investigation phase” on the digital euro project, currently being carried out by the European Central Bank (ECB).
The report highlights the following aspects:
-Consistency with the European Commission and Eurosystem’s Retail Payments Strategies: Clarify the overall vision and strategy of a future EU payments landscape taking into consideration all ongoing innovation and developments in payments. A digital euro as a “raw material” will not be a determining factor in the success of a pan-European payment solution.
-Cost and business models: business models for intermediaries taking their role in offering a digital euro should be possible. It cannot be expected that merchant/corporate acceptance of digital euro can be for free.
-Programmability of payments will be key in the future payments landscape; therefore, it is important to allow for the programmability of digital euro payments.
-Data usage: the digital euro should not aim for transaction data only being accessible to the ECB, as the data should serve to strengthen risk management, improve cybersecurity and consumer protection, and open up new business and innovation opportunities.