As EU moves closer to the digital euro, financial stability and value to customers among key priorities for banking sector
BPFI hosts industry briefing on digital euro following publication of European Commission legislative proposal
Friday 30th June – Banking & Payments Federation Ireland (BPFI) and the Irish Payments Council (IPC) today hosted an industry briefing on the digital euro following the publication this week by the European Commission of a legislative proposal underpinning the possible establishment of the digital currency by the European Central Bank (ECB). The digital euro would offer an electronic equivalent of banknotes and coins, issued by the ECB and the national central banks of the euro zone.
Frances Fitzgerald MEP, who opened today’s event stated: “The digital euro has the potential to be a bold step forward for the euro into a digital payments age. It represents a convenient source of digital money that will be acceptable everywhere in the euro-area – the first truly pan-European digital payments system. As part of this shift, we need to ensure that the ECB maintains monetary sovereignty and that consumers are protected. But if there is no public buy-in then the project will not succeed. Legislators need to ensure public confidence and address all concerns, particularly around privacy and continued access to cash.”
The briefing, which featured contributions from the Central Bank of Ireland, as well as industry experts, explored a range of opportunities and challenges posed by the introduction of the digital euro, including regulation, the role central banks will play, the consumer experience and financial inclusion.
Brian Hayes, Chief Executive of BPFI commenting at the event stated: “The banking industry supports a long-term vision of innovation in the payments sector and sees that new forms of digital currencies and payment methods will be needed to support the digitalisation of the economy. However, to complement the European payments landscape, the digital euro must provide a clear added value for customers and be future proofed by design.”
“From an industry perspective, we believe that the impact of the digital euro on existing banking and payment systems needs to be extensively tested as well as the costs of building the infrastructure to enable the circulation and distribution of the digital euro. We also need to ensure that it creates value and choice for the end-customer and avoids crowding out payment services and options provided by the private sector.”
“Accessibility must also remain central to any new developments. The Commission’s proposal on the legal tender of cash accompanying the digital euro proposal is welcomed, ensuring that cash continues to be a vital part of the payments system. Although cash usage continues to decline, according to the 2022 ECB study cash still accounted for 59% of all retail transactions and 60% of European consumers consider it important to pay in cash. The digital euro must therefore complement and not replace cash.”
Mr Hayes concluded: “From today’s discussions we can see that there are opportunities but also many questions and we look forward to engaging with the European Commission and the ECB in the coming months to inform the development of a financially robust and consumer-friendly digital euro.”
It is anticipated that the ECB decision to launch a digital euro will only be made after the legislative process fully concludes and further assessment is undertaken, which is still likely to be some time away.
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Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has over 125 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.
Contact: Fiona Murphy, Head of Communications, 087 9740046, Fiona.murphy@bpfi.ie or Jillian Heffernan, Director of Communications, 087 9016880, jillian.heffernan@bpfi.ie.
