The concept of a digital euro, or “Cash+,” has been stirring up discussions among stakeholders and French Central Bank Governor, François Villeroy de Galhau. Some proponents argue that its implementation is a necessary duty for central banks in an increasingly digital society. In his recent speech at the Global Official Institutions Conference, hosted by BNP Paribas, Villeroy de Galhau encouraged that central and commercial banks collaborate for the betterment of e-commerce by adopting a digital euro.
The digital euro is viewed as an essential step in bridging the gap between traditional central bank money, which remains in paper form, and the expanding digital landscape where most transactions occur electronically. By issuing a digital euro, central banks would offer a reliable medium of secured transactions without surrendering ground to non-European entities that might issue private digital currencies or so-called “stablecoins.”
On the contrary, there are concerns over the implementation of a digital euro and whether it may lead to disintermediation or disrupt the existing financial system. Some worry that central banks might begin offering private accounts, for instance. However, Villeroy de Galhau was quick to emphasize that central banks have no intention of opening private accounts. Instead, the digital euro would likely work as a “Cash+” — a digital banknote. The use of “Cash+” will be optional, but may offer advantages, such as enabling central bank money for e-commerce.
Villeroy de Galhau’s standpoint focuses on collaboration between central banks and commercial banks to foster seamless integration of tokenized finance and tokenized securities and to facilitate cross-border interoperability, instead of cutting out commercial banks or creating exclusive access. This collaborative approach is expected to generate mutual benefits for both central and commercial banks in the long run.
If approved by the European Central Bank Governing Council, the digital euro could see gradual implementation beginning in 2027 or 2028. As the concept continues to gain traction and provoke both enthusiastic support and cautious skepticism, it’s crucial for all stakeholders to consider the potential consequences and advantages that might come with its adoption.
Source: Cointelegraph
