Fabio Panetta, a member of the Executive Board of the European Central Bank (ECB), spoke at a panel discussion on central bank digital currencies (CBDCs) at the US Monetary Policy Forum. Panetta emphasized the need for CBDCs in a digital world to preserve the role of central bank money in the payments system and safeguard monetary sovereignty. He explained that central bank money, backed by the state, provides confidence and stability in the monetary system, while private money relies on the convertibility into central bank money. Without central bank money, confidence in private money would be undermined, leading to instability in the payments system. Panetta also highlighted the risks of relying on private payment solutions like stablecoins, which could lead to a concentration of power and potential threats to monetary sovereignty. He discussed the benefits of CBDCs, such as improved confidentiality of digital payments, increased choice and reduced costs for users, and enhanced financial inclusion. Panetta acknowledged the challenges of designing a successful CBDC and mentioned that the ECB is actively working on the technical and governance aspects of a digital euro. He concluded by emphasizing the importance of central banks adapting to the digital age and collaborating with other central banks to navigate the potential shifts in the financial landscape.
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