Yves Mersch, a member of the Executive Board of the European Central Bank (ECB), discussed the potential for central bank digital currencies (CBDCs) in a speech at the Consensus 2020 virtual conference. Mersch highlighted that a recent survey by the Bank for International Settlements revealed that over 80% of central banks are exploring CBDCs, including the ECB. He emphasized that the ECB’s interest in CBDCs is driven by the need to be prepared for financial technological innovation that could transform payments and money in disruptive ways. While cash demand remains strong in the euro area, the ECB is considering the possibility of providing the public with a digital currency in the future. Mersch noted that the debate on CBDCs is currently analytical, and whether it becomes a policy debate will depend on the preferences of households. The ECB has set up a task force to explore the optimal design of a CBDC. Mersch discussed different design options, including a token-based digital currency and a CBDC based on deposit accounts with the central bank. He also highlighted the potential impact of a CBDC on the financial system, including the risk of disintermediation and the concentration of power in the central bank. Mersch concluded by stating that the ECB will only introduce a digital currency if it is necessary and proportionate to fulfill its tasks in ensuring currency stability.