Bo inge , Pe e
Resea ch Repo
The digi al eu o and cen al bank digi al cu encies:
Bewa e o aking o oo ea ly
IMK S udy, No. 95
P o ided in Coope a ion wi h:
Mac oeconomic Policy Ins i u e (IMK) a he Hans Boeckle Founda ion
Sugges ed Ci a ion: Bo inge , Pe e (2024) : The digi al eu o and cen al bank digi al cu encies:
Bewa e o aking o oo ea ly, IMK S udy, No. 95, Hans-Böckle -S i ung, Ins i u ü
Mak oökonomie und Konjunk u o schung (IMK), Düsseldo
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STUDY
No. 95 • Sep embe 2024 • Hans-Böckle -S i ung
THE DIGITAL EURO AND CENTRAL
BANK DIGITAL CURRENCIES:
BEWARE OF TAKING
-OFF TOO EARLY
Pe e Bo inge
1
ABSTRACT
The pape discusses cen al digi al cu encies (CBDCs) wi h an analy ical ocus on he
Eu opean Cen al Bank's Digi al Eu o (D€) p ojec , which p o ides a unique lens o
assessing he po en ial and challenges o CBDCs. The pape di e s om he li e a u e
on CBDCs and he D€ by adop ing a sys emic pe spec i e ha dis inguishes be ween
he ole o CBDCs as a new paymen objec and as a new paymen sys em based on
CBDC accoun s. In a wo s -case scena io, he D€ p ojec could be a o al lop, wi h
people no opening accoun s and he sys em ailing o compe e wi h exis ing pla o ms.
This would be in line wi h he dismal expe ience o coun ies ha ha e al eady in o-
duced CBDCs. In a mo e posi i e scena io, many households would open D€ accoun s
alongside comme cial bank accoun s, po en ially educing he dominance o US pla -
o ms. Howe e , e en in his scena io, i is unlikely ha he e will be signi ican holdings
o D€ deposi s as a means o paymen , making he D€ paymen sys em an ine icien
and cos ly de ou be ween exis ing comme cial bank accoun s. The o line e sion e-
mains di icul o jus i y. Ou CBDC acke shows ha he ECB's s ong commi men o
he D€ is unique among cen al banks in ad anced economies. Many o hem, including
he Fede al Rese e, cu en ly ule ou he op ion o a e ail CBDC. Thus, he ECB's
uncondi ional commi men o he D€ ca ies a high isk o ailu e. I is he e o e unclea
why he ECB is no conside ing a scheme based on he exis ing SEPA in as uc u es.
—————————
1 P o . D . Pe e Bo inge , Julius-Maximilians-Uni e si ä Wü zbu g, pe e .bo inge @uni-wue zbu g.de.
The Digi al Eu o and Cen al Bank Digi al Cu encies:
Bewa e o Taking-O Too Ea ly
Augus 2024
Resea ch P ojec o he Hans-Böckle -S i ung
P o esso D . Pe e Bofinge
Julius-Maximilians-Uni e si ä Wü zbu g
II
Table o con en s
1 In oduc ion ..................................................................................................................... 1
2 Wha is CBDC? ................................................................................................................ 4
2.1 CBDC as a paymen objec ............................................................................................ 6
2.2 CBDC as a paymen scheme .......................................................................................... 7
2.3 A sys emic app oach ..................................................................................................... 8
3 The Digi al Eu o: A F on unne in he CBDC Run ............................................................... 8
3.1 Wha a e he objec i es o he ECB’s p ojec ? ................................................................. 8
3.2 The D€ as a paymen objec ........................................................................................... 9
3.2.1 The mac oeconomic pe spec i e: Is he e a need o a “mone a y ancho ” ............. 10
3.2.2 The mic oeconomic pe spec i e: Why should p i a e households ha e a demand o
holding D€ as a paymen objec ? .................................................................................... 13
3.3 The D€ as a paymen sys em ........................................................................................ 15
3.3.1 Paymen ansac ions wi hin he D€ scheme .......................................................... 17
3.3.2 The accep ance o he D€ paymen scheme ........................................................... 18
3.3.3 The dominance o he ECB in he Eu opean e ail paymen sys em .......................... 19
3.3.4 The di icul y o implemen ing he o line solu ion ................................................... 22
4 An al e na i e: a pan-Eu opean paymen scheme based on exis ing in as uc u es ......... 24
5 Scena ios o he D€ ....................................................................................................... 25
6 The in e na ional pe spec i e: a sobe ing pic u e............................................................. 27
7 Summa y: Bewa e o aking o oo ea ly .......................................................................... 28
Re e ences ........................................................................................................................... 29
Annex: A CBDC acke based on cen al bank s a emen s and expe iences ............................ 32
III
The Digi al Eu o and Cen al Bank Digi al Cu encies: Bewa e o Taking-
O Too Ea ly
Execu i e Summa y
Cen al Bank Digi al Cu encies (CBDC) ha e become a ocal poin o cen al banks
wo ldwide: The Bank o In e na ional Se lemen s (BIS) ecen su ey (2024) shows ha
94% o 86 esponding cen al banks we e engaged in CBDC wo k by he end o 2023.
The pape discusses he CBDC wi h an analy ical ocus on he Eu opean Cen al Bank's
(ECB) Digi al Eu o (D€) p ojec . I o e s a unique lens o assessing he po en ial and chal-
lenges o CBDC in an ad anced cu ency a ea. The pape also p o ides anecdo ical e i-
dence on CBDC p ojec s ha ha e al eady been implemen ed. In addi ion, based on
s a emen s o cen al banks in ad anced economies and o he majo cen al banks, he
pape su eys he cu en s a e o discussion on CBDC.
The pape di e s om he li e a u e on CBDC and he D€ by aking a sys emic pe spec-
i e, which consequen ly di e s be ween he ole o CBDC as a new paymen objec and
as a paymen sys em based on CBDC accoun s.
The ECB's mo i a ions o he D€ include mac oeconomic and mic oeconomic conside -
a ions. The mac oeconomic jus ifica ion o a e ail D€ as a “mone a y ancho ” is ques-
ionable as long as he e is su icien o cen al bank money by comme cial banks. This
also applies o a gumen ha p i a e "digi al cu ency a eas" migh displace es ablished
mone a y uni s by p i a e cu ency uni s. So a , he e is no e idence o such de elop-
men s in he e ail space. Thus, om a mac oeconomic pe spec i e he e is no need o
he D€ as a paymen objec .
Mic oeconomic conside a ions do no indica e a demand o holding D€ as a paymen
objec . As a as he online e sion o he D€ is conce ned, he e a e no benefi s o p i-
a e households holding D€ ias a paymen objec . The legal di e ence be ween cen al
bank deposi s and comme cial bank deposi s is i ele an o small deposi holdings.
Mo eo e , holding D€ deposi s in pa allel wi h comme cial bank deposi s inc eases he
isk o nega i e balances o low-income households which in ol es high o e d a in e -
es a es. In pa icula , due o he “wa e all all” unc ionali ies o he D€ scheme, he D€
paymen sys em can be used wi h ze o D€ holdings. The o line e sion o he D€ is in
many cases in e io o holding cash. Consume su eys indica e only e y limi ed use
cases.
The p oposed D€ paymen sys em inc ease he numbe o paymen ansac ions by a
ac o o wo o h ee. This is due o he coexis ence o comme cial bank accoun s and
D€ accoun s which equi es wo sepa a e se lemen s schemes (TARGET2 and N€XT). The
need o open specific bank accoun s o he use o D€, in con as o c edi ca d schemes
IV
and PayPal, may hinde widesp ead public accep ance. In addi ion, as comme cial
banks ha e o open and manage D€ accoun s ee o cha ge, hey a e unlikely o p omo e
D€ accoun s. So a i is unclea which ins i u ion migh ope a e un he D€ paymen sys-
em, i.e. he ne wo k h ough which in o ma ion flows be ween paye s and payees a e
sen . I he ECB we e o ake on his ole, i could s ifle inno a ion and compe i i eness
is-à- is p i a e p o ide s. Implemen a ion p oblems wi h he o line e sion could
p e en sma phone paymen s, which would equi e no e y use - iendly paymen
ca ds.
Gi en hese complexi ies, i is su p ising ha he ECB does no e en men ion he al e na-
i e app oach o c ea ing a pan-Eu opean paymen sys em based on exis ing in a-
s uc u es. A na u al candida e is he SEPA Ins an Paymen Sys em, as he ECB explic-
i ly acknowledged 2019. As he Eu opean Paymen s Ini ia i e a gues, he D€ scheme does
no o e any new alue compa ed o SEPA Ins an Paymen s. This app oach could
achie e he ECB's objec i es, as suppo ed by he Banque de F ance's endo semen o an
EPI-paymen solu ion o Eu opean paymen ma ke so e eign y.
In a wo s -case scena io, he D€ in as uc u e could see limi ed adop ion, wi h people
no opening accoun s and he scheme ailing o compe e wi h exis ing pla o ms. As ou
su ey o exis ing CBDC schemes shows, his would in line wi h he consis en ly poo
expe iences o coun ies ha ha e al eady in oduced CBDCs.
In a mo e posi i e scena io, he D€ paymen scheme will each a wide accep ance, wi h
a high numbe pa allel D€ accoun s alongside comme cial bank accoun s po en ially e-
ducing he dominance o US paymen pla o ms. Howe e , e en in his scena io, signifi-
can holdings D€ deposi s a e unlikely, making he D€ scheme an ine icien and cos ly
de ou be ween exis ing comme cial bank accoun s. The o line e sion emains ha d o
jus i y.
Ou “CBDC acke ”, based on s a emen s o cen al banks in ad anced economies and
o some o he majo cen al banks, shows ha he ECB's absolu e commi men o i s D€
p ojec is unpa alleled. Many cen al banks, including he Fede al Rese e, cu en ly ex-
plici ly uling ou he op ion o a e ail CBDC.
In conclusion, he pe cep ion o a widesp ead e ail CBDC launch o is misleading. The
ECB has emba ked on a dange ous ad en u e wi h high cos s o he axpaye and high
isks o i s epu a ion. The e o e, cen al banks conside ing implemen ing CBDC should
ca e ully sc u inize he D€ p ojec .
1
1 In oduc ion
As he ecen BIS su ey on CBDC (BIS 2024) shows, mo e and mo e cen al banks a e
wo king on CBDC. F om a sample o 86 esponding cen al banks, a he end o 2023, 94%
we e engaged in CBDC wo k (Cha 1). Acco ding o he CBDC T acke p o ided by he
A lan ic Council, in May 2024 134 coun ies and cu ency unions, ep esen ing 98% o
global GDP, a e cu en ly explo ing a CBDC. In May 2020 ha numbe was only 35 (A lan ic
Council 2024).1
Cha 1: Sha e o cen al banks wo king on CBDC
as a pe cen age o esponden s
Sou ce: BIS (2024)
The iew ha CBDC is becoming an indispensable elemen o a na ional mone a y sys em
in same way as cash is also suppo ed by he s ong e o s o he Eu opean Cen al Bank
(ECB) o launch a Digi al eu o (D€). A e an in es iga ion phase (No embe 2021-Oc o-
be 2023), he ECB is now in a p epa a ion phase (No embe 2023-Oc obe 2025) a e
which a phase o “po en ial de elopmen and ollou ” which is scheduled. While he ECB
is a on unne in he g oup o ad anced economies, China and India ha e al eady im-
plemen ed CBDC schemes in hei coun ies.
In his pape , we wan o ake a close look a he discussions on CBDC, especially in ad-
anced economies and majo eme ging ma ke economies. In mos cen al bank epo s
and speeches o cen al bank ep esen a i es, a mo e nuanced iew can be ound ha
di e s om he ECB’s en husias ic commi men o CBDC. In any case, he expe ience o
hose coun ies ha ha e al eady in oduced CBDC sugges s a cau ious assessmen o
he necessi y and p ospec s o success o CBDC.
1 h ps://www.a lan iccouncil.o g/cbdc acke /
2
The ECB’s D€ p ojec p o ides a pa icula ly good basis o assessing he p ospec s o
CBDC. I is al eady ela i ely well de eloped and he e o e makes i possible o iden i y
he p oblems ha could a ise wi h such a undamen al eo ganiza ion o a coun y's o a
cu ency a ea’s mone a y o de . We will he e o e p esen and discuss he Digi al eu o in
de ail below. While he D€ has been discussed in ea lie pape s (Bofinge and Haas
2023b), new ECB publica ions, no ably "Upda e on he wo k o he digi al eu o scheme's
Rulebook De elopmen G oup" (ECB 2024a), "P og ess on he p epa a ion phase o a dig-
i al eu o: Fi s p og ess epo " (ECB 2024b) and a "S ock ake on he digi al eu o" (ECB
2023b) allow a mo e specific analysis o he D€ p ojec .
In sec ion 2, we p esen a sys emic app oach on CBDC. I is cha ac e ized by he insigh
ha he e is no such hing as a “CBDC” o a “Digi al eu o”. Fo an analysis o paymen
sys ems, i is necessa y o di e en ia e be ween paymen objec s, paymen ins umen s
and paymen schemes. We will see ha he p ospec s o CBDC a y depending on he
indi idual cons i uen elemen s.
In sec ion 3, we p esen and discuss he ECB’s D€ p ojec . We show ha he mo i a ions
o he ECB o in oducing he D€ a e based on mac oeconomic and mic oeconomic
conside a ions.
D€ as a paymen objec
In sec ion 3.2 we fi s analyze he jus ifica ion o he D€ as a new paymen objec . We
show ha he e is no need o a e ail D€ as a mone a y ancho , as long as he e is su i-
cien demand om comme cial banks o cen al bank money. We also ques ion he con-
cep o “digi al cu ency a eas” as a jus ifica ion o he D€. So a , he e is no e idence
ha digi al e ail paymen pla o ms plan he in oduc ion o “p i a e cu encies”. In sum-
ma y, we do no see mac oeconomic issues ha call o he in oduc ion o D€ as a pay-
men objec .
F om a mic oeconomic pe spec i e, i is di icul o see why p i a e households should
hold D€ deposi s (online e sion o he D€). The di e ence be ween a cen al bank de-
posi and a comme cial bank deposi , o cen al bank money and p i a e money, is i el-
e an o small deposi holdings. Howe e , o low-income households, holding D€ de-
posi s inc eases he isk o a nega i e balance in he comme cial bank accoun , which is
e y cos ly. Due o he wa e all unc ionali ies, i is no necessa y o ha e a posi i e D€
balance o use he D€ paymen sys em.
As o he o line e sion, which equi es a posi i e D€ balance in a walle , he ques ion
is wha ad an ages i can o e o e using cash. Consume su eys confi m ou finding
ha he e is no ob ious use case o his e sion o he D€.
D€ as a paymen scheme
In sec ion 3.3 we analyze he a ionale o a paymen sys em based on D€ accoun s. We
show ha he scheme en isaged by he ECB leads o a doubling o ipling o se lemen
3
ansac ions due o he pa allel scheme o bank accoun s and se lemen schemes (TAR-
GET and N€XT).
The need o open specific accoun s o he use o he scheme, which is no equi ed o
c edi ca d schemes and PayPal, migh nega i ely a ec he accep ance o a D€ pay-
men scheme. This is pa icula ly challenging as he c ea ion o new ma ke s equi es
“dyadic alliances” be ween he main playe s, i.e., comme cial banks and he cen al
bank. In he case o comme cial banks, i is no e y plausible ha hey would ac i ely
p omo e he opening o D€ accoun s. The insigh ha i migh be di icul o con ince peo-
ple o a D€ has led cen al banke s o hink o en o cing D€ accoun s by making public
paymen s o such accoun s only.
The bluep in s o he D€ paymen sys em indica e a dominan ole o he ECB in a D€
paymen scheme. This could ha e nega i e e ec s on he inno a ion ac i i y o a Eu o-
pean paymen scheme and impai i s compe i i eness is-à- is he dominan p i a e pay-
men schemes.
Finally, he paymen sys em based on he o line e sion aces se ious implemen a ion
p oblems. They could p e en he use o sma phones as paymen ins umen s equi ing
paymen ca ds which a e no e y use - iendly.
In sec ion 4, we b iefly p esen an al e na i e app oach o c ea ing a pan-Eu opean pay-
men sys em ha is independen o US paymen pla o ms. Su p isingly, he ECB has al-
eady floa ed he concep o using he SEPA ins an paymen sys em as he basis o such
a sys em in 2019 unde he heading "SEPA o ca ds". The Eu opean Paymen s Ini ia i e
poin s ou ha he € does no o e any new added alue compa ed o SEPA ins an pay-
men s. Tha such an app oach could also each he objec i es ha he ECB is ying o
each is indi ec ly confi med by he Vice-Go e no o he Banque de F ance, who a gued
ha an EPI-paymen solu ion “will help s eng hen he so e eign y o he Eu opean pay-
men ma ke by p o iding an al e na i e o using o eign schemes such as Mas e ca d and
Visa”.
In sec ion 5, we p esen wo scena ios o he D€. In a wo s -case scena io, he en i e
in as uc u e would no be ac i ely used by he popula ion. People would no open ac-
coun s and he scheme would no be able o wi hs and he compe i ion wi h exis ing pla -
o ms. This would be in line wi h he expe ience o hose coun ies ha ha e al eady im-
plemen ed CDBCs.
In a posi i e scena io, he D€ paymen scheme would be designed a ac i ely enough
o be used by he popula ion which is willing o open D€ accoun s in pa allel o hei com-
me cial banks. In such a scena io, i migh e en be possible o educe he dominance o
US paymen pla o ms. Howe e , e en in such posi i e scena io i is no likely ha he D€
would be used as a paymen objec , i.e., ha people would hold significan deposi s on
hei D€ accoun s. As a esul , he D€ paymen scheme would u n ou as an ine icien
10
D€ on a sma phone walle . Like cash, D€ is c ea ed by wi hd awing om a D€ bank ac-
coun o om an ATM.
The ECB plans holding limi s o bo h o ms o D€ holdings. Fo he online e sion he
holding limi is no ye defined, bu i seems ha i will no exceed 3.000 eu o.6 Due o an i-
money launde ing and comba ing he financing o e o ism (AML/CFT) policies he hold-
ing limi s o o line D€ will be much smalle . I migh also be necessa y o se limi s o
he numbe and he amoun o ansac ions. Thus, he ECB wan s o es ic he holding
o D€ o he mone a y unc ion o a means o paymen by discou aging i s use a s o e o
alue.
The holding limi s o D€ accoun s and he lack o an o e d a acili y equi e a so-called
wa e all- and e e se-wa e all unc ionali y o he D€:
- “Wa e all”: I a D€ accoun is c edi ed by an amoun ha exceeds he holding
limi , he excess amoun is au oma ically ans e ed o he payee’s comme cial
bank accoun .
- “Re e se Wa e all: I a paymen om a D€ accoun exceeds he deposi on ha
accoun , he di e ence is au oma ically p o ided by a ans e om he paye 's
comme cial bank accoun o his D€ accoun .
An analysis o he objec unc ion aises wo in e ela ed ques ions:
- How can he D€ con ibu e o he “mone a y ancho ole” ha he ECB empha-
sizes?
- Wha is he use case o p i a e households o hold D€ online o o line o making
paymen s?
3.2.1 The mac oeconomic pe spec i e: Is he e a need o a “mone a y ancho ”
While he BIS su ey (BIS 2024) shows ha o cen al banks in ad anced economies he
mone a y policy implica ions o CBDC a e no he main mo i a ion (Cha 2), he mone-
a y ancho plays a dominan ole in he ECB’s a gumen a ion o he D€. Fo me membe
o he ECB execu i e boa d, Fabio Pane a (2022a), explains he ole o he mone a y an-
cho as ollows:
“(…) e en digi al paymen s will ul ima ely depend on he ancho ing ole o public money
o unc ion smoo hly. Confidence ha ‘one eu o is one eu o’ wha e e o m i akes es s
on ou abili y o con e , a pa , p i a e money – such as unds held in bank deposi s o
digi al walle s – in o public money, which is he sa es o m o money a ailable. This
6 A ecen Bundesbank esea ch indica es ha he op imal amoun could be in he ange o 1,500 o 2,500
Digi al eu o pe pe son. See Bidde , R. e al. (2024), CBDC and banks: Disin e media ing as and slow,
Deu sche Bundesbank Discussion Pape No 15/2024.
11
possibili y o con e sion ein o ces confidence in he a ious o ms o p i a e money used
o eu o paymen s, ensu ing he smoo h unc ioning o he paymen sys em.”7
In Bofinge and Haas (2023a), we ha e a gued ha he abili y o exchange deposi s om
a comme cial bank accoun in o a D€ accoun in ac con ibu es o he con e ibili y o
p i a e money, which is pa icula ly aluable in a c isis. Thus, a alid a gumen can be
made ha he abili y o hold D€ deposi s could inc ease he confidence in p i a e money.
Bu he ins i u ional design o he D€ as en isaged by he ECB, is no compa ible wi h an
such an ancho ole:
- Making a s ong case o he con e ibili y o comme cial bank money in o cen al
bank money is no compa ible wi h a he low holding limi s.
- The ECB does no plan o allow D€ deposi s o he co po a e sec o .
- The demand o cen al bank deposi s in imes o ins abili y would no be a de-
mand o he D€ as a means o paymen , bu as a s o e o alue.
Low holding limi s o D€ deposi s also ques ion he ECB’s a gumen ha he D€ “is a p e-
condi ion o he con inued e ec i eness o he ECB’s mone a y policy, which is aimed a
p ese ing p ice s abili y”. Mo eo e , i can be shown ha o an e ec i e cen al bank
con ol o e he p ocess o c edi and money c ea ion, i is su icien ha comme cial
banks ha e a s able demand o cen al bank money (Bofinge and Haas 2023a).8 Wi h
he ins umen o minimum ese es, he cen al bank can always gene a e a su icien
demand o bank ese es.
In sum he a gumen s o he ECB o he mone a y ancho ole, which i so a has no
p esen ed in a comp ehensi e heo e ical analysis, a e no e y con incing.
This also applies o he a gumen ha he D€ is equi ed o main ain he con e ibili y
in o cash (B unne meie , 2024)9 in an en i onmen whe e he use o cash is declining in
e ail paymen s. The solu ion o his p oblem is no he issuance o a D€ bu main aining
an adequa e cash in as uc u e by he ECB. In ac , he ECB p omises in i s “Eu osys em
cash s a egy” ha cash will emain “widely a ailable”:
“The ECB and he na ional cen al banks o he eu o a ea a e commi ed o making su e
ha cash emains widely a ailable and accep ed. We he e o e welcome he Eu opean
Commission’s p oposal o a new EU Regula ion o s eng hen he legal ende s a us
7 h ps://eaccny.com/news/chap e news/ecb-speech- abio-pane a-public-money- o - he-digi al-e a- o-
wa ds-a-digi al-eu o/
8 h ps://www.sue .o g/publica ions/sue -policy-no es-and-b ie s/ he-digi al-eu o-cbdc-as-a-mone a y-
ancho -o - he-financial-sys em/
9 „T adi ionell is die Ve anke ung des Eu os im Bankensys em so ges al e , dass die Kon e ibili ä zum
Ba geld das En scheidende is . Wenn ich ein Bankkon o habe, dann kann ich das Gu haben in Ba geld
umwandeln. Wenn die Bedeu ung des Ba gelds zu ückgeh , dann geh diese Ve anke ung e lo en.“
12
o eu o cash. The p oposal aims o ensu e ha access o and accep ance o eu o bank-
no es and coins is legally gua an eed h oughou he eu o a ea.”10
Box: The flawed concep o “digi al cu ency a eas”
The announcemen o Facebook o c ea e a paymen s sys em wi h a new cu ency (Li-
b a)11 was an impo an igge o he engagemen o many cen al banks in he field o
Cen al Bank Digi al Cu encies. Cen al banke s ea ed ha p i a e cu encies migh ou -
compe e public cu encies. B unne meie e al. (2019) suppo ed his iew by p opaga -
ing he concep o “digi al cu ency a eas”:
„The mos impo an consequence o a sys em based on digi al pla o ms may be ha
agen s begin o w i e con ac s in a uni o accoun specific o a pla o m a he han he
cen al bank’s uni o accoun . A change in he uni o accoun con en ion may become
mo e likely wi h a la ge echnological change ha elimina es he use o cash and shi s
economic ac i i y owa ds pla o ms wi h hei own uni s o accoun .” 12
The ailu e o he Lib a concep shows ha he isk o p i a e monies c owding ou public
monies is no e y high. Fi s , e en he Lib a cu ency was no o iginally designed as a
p i a e cu ency, bu as a cu ency baske made up o public monies. Second, his design
was soon abandoned in a o o a concep o s ablecoin Lib as based on na ional cu en-
cies (Dolla -Lib a, Eu o-Lib a, Yen-Lib a, e c.). Bu his did no sa e he p ojec .
The main p oblem wi h c ea ing p i a e cu encies o uni s o accoun is ha cu encies
a e like languages ha a e deeply ensh ined in he minds o people. The e o e, i equi es
high infla ion episodes o people o swi ch o o eign cu encies.
Ano he majo flaw o Lib a was i s design, which equi ed a posi i e balance on a Lib a
accoun in o de o make paymen s. As he PayPal scheme shows, a success ul paymen
scheme simply aps in o exis ing accoun s.
Thus, a leas o he ime being, he isk o p i a e cu encies gaining a dominan posi ion
ha would h ea en he uni o accoun ole o he exis ing cu encies and hus he busi-
ness o cen al banks, canno be ega ded as a jus ifica ion o in oducing a D€.13
10 h ps://www.ecb.eu opa.eu/eu o/cash_s a egy/h ml/index.en.h ml
11 h ps://whi epape .io/documen /475/lib a-1-whi epape
12 B unne meie , M. K., James, H., und Landau, J.-P. (2019). The Digi aliza ion o Money. NBER Wo king Pape
Se ies, No. 26300.
13 B unne meie (2024) s ill belie es in his concep : „Du ch die Digi alisie ung bes eh die Ge ah , dass iele
p i a e Gelde en s ehen we den, mi denen man T ansak ionen du ch üh en kann, die nich no wendige -
weise an den Eu o gekoppel sind. Diese können an ande e Wäh ungen gekoppel sein, sie können abe
auch eigens ändig exis ie en. De Vo eil des digi alen Eu o is , dass man die Koppelung an den Anke des
Eu os wei e behäl und diese Ge ah ü die Einhei de Wäh ung abwende .“ Wo p o okoll
de 81. Si zung Finanzausschuss Be lin, den 19. Feb ua 2024
13
3.2.2 The mic oeconomic pe spec i e: Why should p i a e households ha e a de-
mand o holding D€ as a paymen objec ?
The mac oeconomic a ionale o he D€ can also be assessed om a mic oeconomic pe -
spec i e. Fo he D€ o be an e ec i e mone a y ancho , he e would ha e o be su icien
demand o holding D€ as a paymen objec . As able 1 shows, he holding o D€ can ei he
be ega ded as a subs i u e o holding deposi s on a adi ional bank accoun o o hold-
ing cash in a physical walle .
Online use o he D€
The main di e ence be ween o a deposi in a D€ accoun and a comme cial bank ac-
coun is he ac ha he comme cial bank deposi implies only he igh o con e i in o
cen al bank money while he D€ deposi is cen al bank money. In i s publici y campaigns
o he D€, he ECB a gues wi h he sa e y o he D€:
“A eu o will always be a eu o. One digi al eu o would always be wo h exac ly he same as
a €1 coin.” 14
Bu in p ac ical li e his di e en ia ion is o li le ele ance due o he deposi insu ance
schemes which p o ec bank deposi s in he EU o up o 100.000 eu o. I would be a dan-
ge ous s a egy i he ECB ied o sell he D€ wi h a gumen ha bank deposi s a e no
100% sa e.
One migh hink ha , a leas in he in oduc o y phase, he demand o CBDC deposi s
could be inc eased by paying a ac i e in e es a es. Howe e , his is excluded by A icle
16 (“Limi s o he use o he digi al eu o as a s o e o alue”) o he P oposal o a Regula-
ion o he Eu opean Pa liamen and o he Council:
“Wi hin he amewo k o his Regula ion, he digi al eu o shall no bea in e es .”
While he e a e no ob ious benefi s o holding deposi s in D€ accoun s, one can a gue
ha his could lead o highe banking cos , especially o people wi h low incomes. A pa -
allel holding o deposi s on he comme cial bank and he D€ accoun inc eases he isk
o an o e d a o he comme cial bank accoun which is e y cos ly. In addi ion, as he
D€ accoun does no p o ide an o e d a acili y, he comme cial bank accoun will al-
ways emain he dominan accoun .
One migh hink ha he abili y o use he D€ paymen scheme migh be an incen i e o
hold deposi s on he D€ accoun . Bu due o he wa e all unc ionali ies, he D€ paymen
scheme can be used while always keeping a ze o balance on he D€ accoun .
The e o e, om an in o ma ion and ansac ion cos s pe spec i e, he bes solu ion o
households is o main ain a ze o balance on he D€ accoun and o ake ull ad an age o
he wa e all unc ionali y.
14 h ps://www.ecb.eu opa.eu/eu o/digi al_eu o/ ea u es/h ml/index.en.h ml
14
This also shows ha he ECB’s a gumen ha he D€ has “cash-like ea u es” does no
apply o he online e sion. While using he cash paymen sys ems equi es a holding o
cash, he D€ paymen sys em can be used wi h ze o holdings o D€ deposi s.
O line use o he D€
The o line use o he D€ equi es holding a posi i e D€ balance in he digi al walle . In his
ega d, he D€ is like cash. Bu he use case o he o line use is no e y clea . E en wi h-
ou in e ne connec ion, o line c edi paymen s a e al eady possible, e.g. du ing fligh s.
When paying wi h a c edi ca d on a plane, he o line c edi line s o ed on he ca d ap-
plies.
A “S udy on Digi al Walle Fea u es” p oduced by Kan a (2023) o he ECB ques ioning
ocus g oups comes o he ollowing conclusion:
“The possibili y o paying o line was conside ed he mos inno a i e o he p esen ed
paymen ea u es. None o he pa icipan s ecalled ha ing used his op ion ia o he pay-
men me hods. In e e y coun y, mos pa icipan s acknowledged he con enience o his
unc ion o si ua ions whe e hey do no ha e access o he in e ne (e.g. in a eas wi hou
in e ne co e age, when unning ou o da a, o when using in-fligh mode). Howe e , mos
also no ed ha hese si ua ions a e a he limi ed, so hey hough hey would a ely use
his op ion.” 15
Like cash, holding posi i e D€ balances on a sma phone walle implies he isk ha one
loses he sma phone o ha i is s olen. The e o e, compa ed wi h he online use he
only benefi o he o line use is a highe deg ee o anonymi y. Bu i anonymi y is he ele-
an c i e ion, i is no clea why he Digi al eu o should be a supe io solu ion o cash.
Fo a compa ison o he ad an ages o o line D€ holdings compa ed wi h cash one can
use he in o ma ion on he Bundesbank’s websi e, which p o ides a comp ehensi e de-
sc ip ion o he ad an ages o using cash (Table 4).16
Table 4: The ad an ages o using cash
Cash (Bundesbank)
Digi al Eu o
“I ensu es you eedom and au onomy. Bank-
no es and coins a e he only o m o money ha
people can keep wi hou in ol ing a hi d pa y. You
don’ need access o equipmen , he in e ne o
elec ici y o pay wi h cash, meaning i can be used
when he powe is down o i you lose you ca d.”
The D€ equi es equipmen in he o m o a
sma phone and i also equi es ha he ba e y is
no emp y
“I ’s legal ende ”.
The p oposal o a REGULATION OF THE EURO-
PEAN PARLIAMENT AND OF THE COUNCIL on he
es ablishmen o he “Digi al eu o” om 28 June
15 h ps://www.ecb.eu opa.eu/p ess/p /da e/2023/h ml/ecb.p 230424_1_annex~93abdb80da.i .pd
16 h ps://www.bundesbank.de/en/ asks/cash-managemen / he-eu osys em-cash-s a egy/ he-eu osys-
em-cash-s a egy-and- he- ole-o -cash-859166
15
2023 g an s he D€ legal ende s a us in A icle 7.
Bu A icle 9 defines a se o excep ions which in-
cludes he igh o a mic oen e p ise no o accep
he Digi al eu o, unless i accep s compa able dig-
i al means o paymen . Thus, while cash mus be
accep ed gene ally, his would no be he case o
he D€.
I ensu es you p i acy. Cash ansac ions espec
ou undamen al igh o ha e ou p i acy, da a and
iden i y p o ec ed in financial ma e s
E en i he o line use would allow a highe deg ee
o anonymi y, i would no each he anonymi y o
cash
I ’s inclusi e. Cash p o ides paymen and sa ings
op ions o people wi h limi ed o no access o dig-
i al money, making i c ucial o he inclusion o so-
cially ulne able ci izens such as he elde ly o
lowe -income g oups
The use o he D€ equi es a ce ain deg ee o digi-
al compe ence which no gua an eed by elde ly o
lowe income g oups
“I helps you keep ack o you expenses. Cash al-
lows you o keep close con ol o you spending,
o example by p e en ing you om o e spending.”
Digi al solu ions canno subs i u e he cons ain
se by physical money.
I ’s as . Bankno es and coins se le a paymen in-
s an ly.”
In his ega d, he D€ and cash a e simila
I ’s secu e. Cash has p o en o be secu e in e ms
o cybe c ime, aud and coun e ei ing. And, as i ’s
cen al bank money, i doesn’ en ail financial isks
o ei he he paye o he payee.”
The e is also no ob ious di e ence be ween he D€
and cash.
“I ’s a s o e o alue. Cash is mo e han jus a pay-
men ins umen . I allows people o hold money
o sa ing pu poses wi hou de aul isk. I is use ul
o small pe son- o-pe son gi s and paymen s. Fo
example, pa en s can en us small amoun s o
cash o hei child en o small pu chases, (…)
Cash also con ibu es o he financial li e acy o
child en.”
This aspec clea ly a o s he using o cash ins ead
o D€ which is explici ly designed o a oid he use
o he D€ as a s o e o alue.
In sum, he e is no ob ious case o o line use whe e he D€ would be supe io o cash.
3.3 The D€ as a paymen sys em
Fo he ECB he need o a pan-Eu opean paymen solu ion and he so e eign y o he Eu-
opean paymen sys em play a decisi e ole in i s D€ p ojec :
“The Eu osys em’s Digi al eu o p ojec aims o ensu e cen al bank money e ol es along-
side cu en paymen p e e ences and ends, as well as o acili a e elec onic paymen s
e e ywhe e in he eu o a ea and s eng hen Eu ope’s s a egic au onomy.” 17
17h ps://www.ecb.eu opa.eu/eu o/digi al_eu o/p og ess/sha ed/pd /ecb.dep p202406.en.pd
16
The ECB jus ifies he need o he D€ wi h he ollowing a gumen : “Cu en ly, he e is no
Eu opean digi al paymen op ion ha co e s he en i e eu o a ea”18
In 2019, he ECB made a simila s a emen bu acknowledging ha he e a e no p oblems
paying all o e Eu ope wi h one ca d:
“The Eu osys em acknowledges ha , in gene al, Eu opean ca dholde s a e able o pay
wi h one ca d all o e Eu ope. Howe e , a p esen he pan-Eu opean accep ance o ca ds
issued unde a na ional ca d scheme is en i ely elian on co-badging wi h an in e na-
ional ca d scheme.”
While he dominance o he US paymen pla o ms, especially in ca d schemes, can be
ega ded as a ma ke ailu e which jus ifies a go e nmen in e en ion, i is no ob ious
whe he a paymen s scheme based on he D€ would be he bes solu ion o his p oblem.
Two di e en op ions a e possible:
- In oducing a D€ paymen scheme which connec s he exis ing na ional schemes
indi ec ly by he c ea ion o pa allel in as uc u es based on D€ accoun s.
- Connec ing he na ional in as uc u es di ec ly by he c ea ion o a Eu opean-
wide ca d scheme o by making he exis ing schemes in e ope able h oughou he
Eu ope.
Since emba king on he D€ p ojec he ECB has ne e explici ly discussed he p os and
cons o such an al e na i e app oach. This app oach would ha e he ad an age ha one
could use he exis ing paymen in as uc u es ins ead o c ea ing a comple ely new pay-
men uni e se. In addi ion, i would be in be e condi ion o he compe i ion wi h US pay-
men pla o ms as i would be based on e ail paymen schemes which a e widely in use
and wi h which cus ome s a e al eady amilia .
18 h ps://www.ecb.eu opa.eu/eu o/digi al_eu o/h ml/index.en.h ml
17
3.3.1 Paymen ansac ions wi hin he D€ scheme
The ECB p esen s he D€ paymen sys em wi h he ollowing cha (Cha 4):
Cha 4: The D€ paymen scheme
Sou ce: ECB (2024a)
I shows he special ea u e o he D€ paymen sys em ha i can only ope a e wi h D€
accoun s. Compa ed wi h exis ing paymen schemes his leads o a ipling o ansac-
ions:
- In o de o make a paymen o m a paye o a payee, he scheme ans e s money
om he paye ’s i s comme cial bank accoun o i s D€ accoun ( unding/ e e se
wa e all). This ansac ion is execu ed ia TARGET2.
- F om he D€ accoun o he paye a ansac ion is made o he D€ accoun o he
payee. This ansac ion is execu ed ia N€XT, he ECBs scheme o D€ online pay-
men s. 19
- As fi ms will no be allowed o hold posi i e D€ balances, he money will be imme-
dia ely ans e ed o he payee’s comme cial bank accoun (de unding/wa e all)
which again equi es a TARGET2 ansac ion.
In he unlikely case, ha he paye holds a posi i e balance on i s D€ accoun , which is
su icien o he paymen , he ansac ions only double.
Thus, compa ed wi h a solu ion based on exis ing in as uc u es he D€ scheme equi es
- a pa allel sys em o bank accoun s and
19 “The digi al eu o back-end p o o ype o online paymen s, called N€XT, is a bespoke design
de eloped om sc a ch by he Eu osys em. The a chi ec u e o N€XT is no ha o a dis ibu ed
ledge , a he i is based on a UTXO da a model which has been made popula by dis ibu ed
ledge echnologies (DLTs).” (EZB, 2023b, p. 5)
18
- a pa allel se lemen scheme o D€ se lemen s (N€XT) as TARGET2 is ese ed
o he se lemen be ween banks.
While he ECB has ne e p esen ed an es ima e o he cos s o es ablishing and ope a ing
such a pa allel paymen uni e se, i seems likely ha i will be mo e expensi e han a so-
lu ion based on exis ing s uc u es. The mul iplica ion o se lemen ansac ions is also
di icul o econcile wi h he ECB’s commi men o sus ainabili y which Vice-P esiden
Guindos (2023) has s a ed as ollows:
“Looking o he u u e, we will con inue o honou ou commi men s o s epping up ou
sus ainabili y and clima e p o ec ion e o s.”
3.3.2 The accep ance o he D€ paymen scheme
The pa allel s uc u es o he D€ paymen scheme a e no only e y expensi e hey migh
also jeopa dize he accep ance by he public and hus educe i s compe i i eness ela i e
o US paymen pla o ms.
The main impedimen is he need o open an addi ional bank accoun which is no e-
qui ed o he use o c edi ca d schemes o e.g. PayPal. In addi ion, o many people he
logic o he wa e all unc ionali ies and he lack o an o e d a acili y will no be ob ious.
A majo disad an age o he D€ scheme compa ed wi h o he paymen pla o ms is i s
limi a ion on accoun s denomina ed in eu o. This educes i s egional scope o he eu o
a ea so ha e en Eu ope is no comple ely co e ed by his paymen scheme. Thus, i is
no co ec i he ECB p aises he D€ as a “pan-Eu opean paymen solu ion”.
Fo he compe i ion wi h o he pla o ms, one has o conside ha hey o e no only he
pu e paymen ansac ion bu also ela ed se ices, abo e all consume loans (wi hou
in e es in he sho - e m) and consume p o ec ion in online pu chases. Some pla o ms
also o e financing and ma ke ing se ices o me chan s.
Comme cial banks play a c ucial ole in he accep ance o he D€ scheme, as hey a e he
only ins i u ion ha communica es di ec ly wi h po en ial D€ use s. As Ozcan and Gu ses
(2019) show, an impo an p econdi ion o he c ea ion o new ma ke s is he coope a ion
be ween he dominan playe s (“dyadic alliances”). This is especially impo an , i he
“new ma ke equi es complemen a y esou ces om di e en kinds o la ge fi ms o
la ge fi ms om di e en indus ies”. In his case, he au ho s also men ion he “Di icul y
in eaching an ag eemen due o di e ging plans o he new ma ke (…) and belie s abou
ela i e ba gaining powe .”
Acco ding o he ECB’s design o he D€, comme cial banks a e obliged o open and o
manage D€ accoun s ee o cha ge. In addi ion, i a cus ome decides o ans e depos-
i s om i s comme cial bank accoun o a D€ accoun , he bank su e s a loss o cheap
efinancing which i has o subs i u e by mo e cos ly efinancing sou ces. While he ac-
cep ance among me chan s migh be suppo ed by lowe ees, i is unlikely ha hey
19
would s op accep ing he es ablished paymen schemes. The e o e, on he side o he
cus ome s he e would be no incen i e o swi ch o he D€.
Rep esen a i es o he Eu osys em also do no seem o be con inced o he accep ance
o he D€ scheme. They he e o e en isage en o cing he opening o D€ accoun s by
making public paymen s on D€ accoun s only. E.g. Bu kha d Balz (2024), membe o he
Bundesbank execu i e boa d, a he public hea ing o he Finanzausschuss o he Ge man
Pa liamen on 9 Feb ua y 2024 made he ollowing s a emen :
“The specific use case, as we call i , is paymen s om go e nmen agencies di ec ly o
people ia he digi al eu o walle o ice e sa.” (ou ansla ion).
And:
“Fo me, use cases also include, o example, being able o pay child benefi di ec ly and
o he s a e benefi s.” (ou ansla ion)
One could a gue ha in he pas i had no been possible o make di ec paymen s om
he go e nmen o i s ci izens, e.g. du ing he ene gy c ises. Bu in Ge many, he ins i u-
ional amewo k has been changed by linking he ax numbe wi h he IBAN numbe so
ha i is now possible o make such di ec paymen s. 20
O e all, o cing people o open D€ accoun s would ha e a nega i e impac on he public
pe cep ion o Eu opean in eg a ion. Al eady oday, many people ha e he imp ession ha
he EU is in ol ing o much in a eas which go beyond i s compe encies. In addi ion, as he
expe ience wi h he Digi al Yuan shows, people who ecei e such paymen s seem o
ans e he unds immedia ely o hei comme cial bank accoun .21
3.3.3 The dominance o he ECB in he Eu opean e ail paymen sys em
Acco ding o he ule book (ECB 2024a), he Digi al Eu o Se ice Pla o m (DESP) would
become he key playe in he D€ paymen scheme. As Cha 5 shows, his ins i u ion
would p o ide he link be ween he bank o he paye and he bank o he payee. The ule-
book (ECB 2024a) desc ibes e.g. he case o a paymen which is ini ia ed by he paye as
ollows:
“1. The paye p esen s he amoun o be paid o he payee.
2. The payee e ifies he amoun , consen s and aps o accep he paymen .
3. The paye ecei es he payee’s consen and submi s he paymen eques o i s
in e media y.
20h ps://www.bundesfinanzminis e ium.de/Con-
en /DE/S anda da ikel/Themen/S eue n/Wei e e_S eue hemen/O ganisa ion_Au oma ion/2023-12-11-
meldung-iban-bzs .h ml
21h ps://www.coindesk.com/policy/2024/05/13/chinas-digi al-yuan-isn - aking-o -despi e-s a e-em-
ployee-sala y- ial- epo /
26
D€ as a paymen scheme
The ECB a gues on he mac oeconomic le el ha he D€ is needed as a mone a y ancho
in an inc easingly digi al financial sys em. Bu one can show ha his is no an ex e nali y
ha could jus i y a undamen al change in he di ision o labo be ween he cen al bank
and comme cial banks.
The mic oeconomic a gumen ha holding D€ deposi s p o ides he “benefi s o cen al
bank” is also no con incing. Wi h an e ec i e deposi insu ance bank deposi s a e as
sa e as cen al bank money. Bu o households he need o hold pa allel accoun s would
lead o addi ional ansac ions and in o ma ion cos s. Wi h ze o in e es and he possibil-
i y o use he D€ paymen scheme wi h ze o balances he use case o holding deposi s
on D€ accoun s is no clea .
The o line use o he D€ equi es a posi i e balance on a walle o a ca d. Bu he use
cases o his unc ionali y a e limi ed and i is unclea whe he i would be e y use -
iendly.
D€ as a paymen scheme
In he case o paymen schemes, he ECB a gues ha he D€ is equi ed o he sake o
he “s a egic au onomy o he Union’s paymen ecosys em”. While his is a clea ex e -
nali y, one mus ask whe he he c ea ion o comple ely new D€ paymen scheme is he
op imum solu ion.
Acco ding o he ule book, he ECB is planning o es ablish a comp ehensi e pan-Eu o-
pean paymen scheme which is ese ed o ansac ions be ween D€ accoun s. This e-
qui es high cos s o c ea ing and main aining he D€ in as uc u e. I migh impai he
a ac i eness o he scheme as, in con as o o he paymen schemes, i equi es open-
ing a new bank accoun . In addi ion, he scheme would duplica e he exis ing SEPA
scheme which is open o all kinds o bank accoun s.
I he ECB s icks o i s D€ p ojec , which is likely a e i s s ong e o s so a , om he
analysis o his pape wo scena ios can be de i ed.
A wo s case scena io:
In he wo s -case scena io, he D€ p ojec becomes a comple e ailu e. Mos households
would no open a D€ accoun and hose who would open i , would only keep e y low bal-
ances on i . Due o he lack o pa icipan s, he D€ paymen scheme would no each a
su icien co e age among me chan s so ha i would also no a ac i e o paymen se -
ice p o ide s o connec wi h he scheme. Due o i s echnical complexi y he o line D€
would also no be used in a significan way. Wi h his ou come, he epu a ion o he ECB
would ecei e a se ious blow as i would need o jus i y he huge in es men cos s o pa -
allel in as uc u es ha emain widely unused.
27
A posi i e, bu ine icien scena io:
In a posi i e scena io, mos households open a D€ accoun . Bu hey make ull use o he
wa e all unc ionali ies and do no hold any significan balances on hei D€ accoun s. A
paymen se ice p o ide can be ound ha supplies a common paymen ins umen ,
which is widely used by households and me chan s. A la ge sha e o e ail ansac ions is
made wi h he D€ paymen scheme and he dominance o US pla o ms is educed. In
his scena io, he D€ sys em would de ac o p o ide an indi ec paymen in as uc u e
o comme cial bank accoun s. As al eady men ioned, such a scheme would, compa ed
wi h cu en in as uc u es, lead o a ipling o paymen ansac ions which is di icul o
econcile wi h he ECB’s a emp s o “suppo ing an o de ly ansi ion o a clima e-neu al
economy”, and o ecognize “ he impo ance o con inuing o d i e posi i e change by e-
ducing i s own impac on he en i onmen .”
Thus, in such a scena io he D€ would ul ima ely p o ide a complex de ou solu ion o
paymen s be ween comme cial bank accoun s. I would be a cos ly subs i u e o he
di ec solu ion o educing dependence on non-Eu opean paymen pla o ms ia a SEPA
o ca ds. In addi ion o he complexi y and he cos s, he dominan ole o he ECB in such
a scheme could ha e nega i e e ec s on inno a ion and use - iendliness wi h he e ec
ha he DE scheme canno success ully compe e wi h he dominan in e na ional pla -
o ms.
A con incing use case o he o line D€ is di icul o imagine, e en in a posi i e scena io.
6 The in e na ional pe spec i e: a sobe ing pic u e
Ou c i ical assessmen o he D€ is suppo ed by an in e na ional pe spec i e. In he An-
nex 1 we show ha none o he exis ing CBDC p ojec s ha e no been able o gain a sig-
nifican ma ke sha e al hough he au ho i ies ied o suppo hei usage. So a he e is
no a single CBDC success s o y.
In Annex 2, we p o ide ou own “CBDC T acke ” which gi es a comp ehensi e o e iew
o he assessmen o CBDC by he cen al banks in he majo OECD coun ies. The esul
is s iking: In con as o epo s ha mo e and mo e coun ies a e engaging in CBDC p o-
jec s, mos cen al banks ha e a a he scep ical a i ude owa ds he necessi y o a e ail
CBDC. This finding is suppo ed by he ecen BIS su ey (BIS 2024), which shows ha he
numbe o cen al banks which a e planning o in oduce a e ail CBDC in he medium
e m is declining.
28
Cha 7: Likelihood o issuing a CBDC in he o eseeable u u e (As a pe cen age
o esponden s ha ha e no issued a CBDC)
Sou ce: BIS (2024)
The absolu e numbe o cen al banks ha a e planning o in oduce a e ail CBDC wi hin
he nex ew yea s has declined om 11 o six. Thus, he inc easing engagemen o cen al
banks in CBDC seems o ha e led o a ce ain disillusionmen .
7 Summa y: Bewa e o aking o oo ea ly
E en hough he numbe o cen al banks dealing wi h CBDC is s ill inc easing, his should
no lead o he imp ession ha we a e now on he e ge o a b eak h ough in his inno a-
ion. The p ojec s implemen ed so a a e any hing bu success s o ies. The majo i y o
la ge and majo cen al banks ha e a scep ical and o en nega i e a i ude owa ds CBDC.
Agains his backd op, he ECB is aking a majo isk wi h i s uncondi ional commi men
o he Digi al eu o. E en unde op imis ic assump ions, i is di icul o imagine de elop-
men s in which he ECB's objec i es can be achie ed in an e icien manne . I is di icul
o unde s and why he ECB insis s on de eloping a comple ely new pa allel uni e se in-
s ead o a emp ing o in eg a e he exis ing and e icien sys ems in such a way ha a
solu ion can be de eloped ha can compe e e ec i ely wi h he US pla o ms.
Gi en he la ge financial and in angible in es men s ha he ECB has al eady made in his
p ojec , i is unlikely o be poli ically possible o i o ge o he ain again. This should
se e as a wa ning o cen al banks ha ha e so a been cau ious abou CBDCs no o
jump on such a bandwagon oo soon.
29
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zum Digi alen Eu o. In e ne : h ps://www.bundes ag.de/ e-
sou ce/blob/995074/5 84dba6427542 da28d3cb5439b3854/P o okoll.pd
Bank o In e na ional Se lemen s (2024), Emb acing di e si y, ad ancing oge he – e-
sul s o he 2023 BIS su ey on cen al bank digi al cu encies and c yp o, by Albe o Di
Io io, Anneke Kosse and Ila ia Ma ei. BIS Pape s 147, June 2024. In e ne :
h ps://www.bis.o g/publ/bppd /bispap147.h m
Bank o In e na ional Se lemen s Commi ee on Paymen s and Ma ke In as uc u es
(2016), Glossa y, h ps://www.bis.o g/cpmi/publ/d00b.h m?m=114
Banque de F ance (2018), "Paymen s and ma ke in as uc u es in he digi al e a",
Chap e 2, Means o paymen and paymen ins umen s, In e ne : h ps://www.banque-
ance. /en/publica ions-and-s a is ics/publica ions/book-paymen s-and-ma ke -in a-
s uc u es-digi al-e a
Beau, D. (2023), Money and paymen s in he digi al age, Speech Uni e si é B e agne
Sud, 10 No embe 2023, In e ne : h ps://www.banque- ance. /en/go e no s-in e en-
ions/money-and-paymen s-digi al-age
Be lin G oup (2024), Reconcilia ion and Se lemen o Ca d Paymen s ia Ins an Pay-
men s and P emium Paymen APIs, A Whi e Pape as an In oduc ion o he Topic. In e -
ne : h ps://www.be lin-g oup.o g/_fi-
les/ugd/c2914b_d96e8032913e40878604a5a3720d27bd.pd
Bidde , R., Jackson, T. and M. Ro ne (2024). BDC and banks: Disin e media ing as and
slow, Discussion Pape Deu sche Bundesbank, No 15/2024. In e ne : h ps://www.bun-
desbank.de/ esou ce/blob/931090/be2be8b2c5324245e4147d6306689312/mL/2024-
04-29-dkp-15-da a.pd
Bofinge , P. and T, Haas (2023a), The Digi al Eu o (CBDC) as a Mone a y Ancho o he Fi-
nancial Sys em, SUERF Policy No e, Issue No 309, Ap il 2023. In e ne : h ps://www.su-
e .o g/wp-con en /uplo-
ads/2023/12/ _39cb 7bd666de7d755c556b218a29054_65263_sue .pd
Bofinge , P. and T. Haas (2023b), The Digi al Eu o: Benefi s, Cos s and Risks, Expe
opinion commissioned by he Bank and Insu ance Di ision o he Aus ian Economic
Chambe s, Uni e si y Wü zbu g, July 2023. In e ne : h ps://www.wiwi.uni-wue z-
bu g.de/ wl1/ak uelles/single/news/gu ach en-und-p essekon e enz-zum-digi alen-
eu o
30
B unne meie , M. K., James, H., und Landau, J.-P. (2019). The Digi aliza ion o Money.
NBER, Wo king Pape Se ies, No. 26300. In e ne : h ps://www.nbe .o g/pape s/w26300
B unne meie (2024), S a emen beim Hea ing des Finanzausschusses am 19. Feb ua
2024 zum Digi alen Eu o. In e ne : h ps://www.bundes ag.de/ e-
sou ce/blob/995074/5 84dba6427542 da28d3cb5439b3854/P o okoll.pd
Cipilone, P. (2024), Feedback on commi men s o e ed by Apple o e access es ic ions
o nea -field communica ion echnologies, Le e om 19 Ap il 2024. In e ne :
h ps://www.ecb.eu opa.eu/pub/pd /o he /ecb.le e 240419_B e on~ e4828c691.en.pd
De Guindos, L. (2023), Fo ewo d, 2023 upda e o he ECB’s En i onmen al S a emen .
In e ne : h ps://www.ecb.eu opa.eu/ecb/clima e/g een/pd /ecb.en i onmen als a e-
men 202307~59d31 2a e.en.pd
Deu sche Bundesbank, The Eu osys em cash s a egy and he ole o cash, In e ne :
h ps://www.bundesbank.de/en/ asks/cash-managemen / he-eu osys em-cash-s a -
egy/ he-eu osys em-cash-s a egy-and- he- ole-o -cash-859166
ECB (2019), Ca d paymen s in Eu ope: Cu en landscape and u u e p ospec s: a Eu-
osys em pe spec i e, Ap il 2019. In e ne : h ps://www.ecb.eu-
opa.eu/pub/pd /o he /ecb.ca dpaymen sineu_cu en landscapeand u u ep os-
pec s201904~30d4de2 c4.en.pd
ECB (2021), Eu osys em o e sigh amewo k o elec onic paymen ins umen s,
schemes and a angemen s, No embe 2021, In e ne : h ps://www.ecb.eu-
opa.eu/paym/pd /consul a ions/ecb.PISApublicconsul a ion202111_1.en.pd
ECB (2023a), Opinion o he Eu opean Cen al Bank o 31 Oc obe 2023 on he digi al
eu o, (CON/2023/34), O icial Jou nal o he Eu opean Union, In e ne : h ps://eu -
lex.eu opa.eu/legal-con en /EN/TXT/PDF/?u i=CELEX:52023AB0034
ECB (2023b), A s ock ake on he digi al eu o, 18 Oc obe 2023, In e ne :
h ps://www.ecb.eu opa.eu/eu o/digi al_eu o/ imeline/p o-
use/sha ed/pd //ecb.dedocs231018.en.pd
ECB (2024a), Upda e on he wo k o he digi al eu o scheme’s Rulebook De elopmen
G oup, 3 Janua y 2024, In e ne : h ps://www.ecb.eu opa.eu/eu o/digi al_eu o/ ime-
line/p o use/sha ed/pd /ecb.dego 240103_RDG_digi al_eu o_schemes_upda e.en.pd
ECB (2024b), P og ess on he p epa a ion phase o a digi al eu o: Fi s p og ess epo ,
24 June 2024, In e ne : h ps://www.ecb.eu opa.eu/eu o/digi al_eu o/p o-
g ess/sha ed/pd /ecb.dep p202406.en.pd
31
Eu opean Commission (2023), P oposal o a REGULATION OF THE EUROPEAN PARLIA-
MENT AND OF THE COUNCIL on he es ablishmen o he digi al eu o. B ussels,
28.6.2023, COM(2023) 369 final. In e ne : h ps://eu -lex.eu opa.eu/ e-
sou ce.h ml?u i=cella :6 2 669 -1686-11ee-806b-01aa75ed71a1.0001.02/DOC_1& o -
ma =PDF
Eu opean Paymen s Ini ia i e (2024), S a emen beim Hea ing des Finanzausschusses
am 19. Feb ua 2024 zum Digi alen Eu o. In e ne : h ps://www.bundes ag.de/ e-
sou ce/blob/995074/5 84dba6427542 da28d3cb5439b3854/P o okoll.pd
Kan a Public (2023), S udy on Digi al Walle Fea u es, Ma ch 2023. In e ne :
h ps://www.ecb.eu opa.eu/p ess/p /da e/2023/h ml/ecb.p 230424_1_an-
nex~93abdb80da.i .pd
Ozcan, P. and K. Gu ses (2019), Collabo a i e Ma ke Making: The C i ical Role o Dyadic
and Mul ipa ne Alliances in he Fo ma ion o New Ma ke s, in. The Ox o d Handbook o
En ep eneu ship and Collabo a ion, Edi ed by Je ey J. Reue , Sha on F. Ma usik, and
Jessica Jones, In e ne : h p://pina ozcan.com/wp-con en /uploads/2020/10/ox o dhb-
9780190633899-e-23.pd
Pane a, Fabio (2022a), Public money o he digi al e a: owa ds a digi al eu o; Speech
Dublin, 16 May 2022. In e ne : h ps://www.ecb.eu-
opa.eu/p ess/key/da e/2022/h ml/ecb.sp220516~454821 0e3.en.h ml
Pane a, F. (2022b), Demys i ying wholesale cen al bank digi al cu ency, Speech F ank-
u am Main, 26 Sep embe 2022. In e ne : h ps://www.ecb.eu-
opa.eu/p ess/key/da e/2022/h ml/ecb.sp220926~5 9b85685a.en.h ml
S e iges Riksbank (2023), E-k ona epo , E-k ona pilo , phase 3, Ap il 2023. In e ne :
h ps://www. iksbank.se/en-gb/paymen s--cash/e-k ona/e-k ona- epo s/e-k ona-pilo -
phase-3/
S e iges Riksbank (2024), E-k ona epo , E-k ona pilo , phase 4, Ma ch 2024. In e ne :
h ps://www. iksbank.se/globalasse s/media/ appo e /e-k ona/2024/e-k ona-pilo -
phase-4.pd
32
Annex: A CBDC acke based on cen al bank s a emen s and expe iences
I. Coun ies which ha e implemen ed o plan in oducing CDBC
Bahamas
China
Eas e n Ca ibbean Cu ency Union (ECCU)
India
Jamaica
Mexico (planned)
Nige ia
II. Coun ies wi h a scep ic iew o CBDC (ad anced economies, B azil,
Chile, Indonesia, Malaysia, Kenya, Philippines)
Aus alia
B azil
Canada
Chile
Czech Republic
Denma k
Hong Kong SAR
Iceland
Indonesia
Is ael
Japan
Ko ea
Malaysia
New Zealand
No way
Philippines
Singapo e
Sweden
Swi ze land
Thailan
Taiwan
Uni ed Kingdom
Uni ed S a es
33
Pa I: Coun ies which ha e s a ed a CBDC p ojec o announced he s a o
a CBDC p ojec
In he ollowing, we p esen e idence om newspape s and online epo s, as i no pos-
sible o find su icien in o ma ion he issuance o CBDC on cen al bank websi es. The
links o he sou ces a e p o ided wi hin he ex .
Bahamas
Sand Dolla only 0.19 % o he o al cu ency in ci cula ion
“Abou one yea a e he Sand Dolla wen na ionwide (Oc obe 20, 2020), Sand Dolla
ci cula ion eached a ound B$300,000; howe e , adop ion was ela i ely fla o he ol-
lowing yea . In May 2023, he Sand Dolla had abou 104,664 consume walle s and
a ound 1,500 me chan walle s (CBOB 2023). A e a se ies o Sand Dolla educa ional
campaigns, p omo ions, and gi eaways—as well as he in eg a ion o he CBDC wi h go -
e nmen paymen s and he ACH sys em—ci cula ion ose by abou B$1 million, eaching
B$1,099,910 by Sep embe 2023 (B anch, Wa d, and W igh 2023). S ill, his alue
amoun s o only 0.19 pe cen o he o al cu ency in ci cula ion a he ime.”
Sou ce: F anklin Nol, Obse a ions om he Re ail CBDCs o he Ca ibbean, Fede al Rese e Bank o
Kansas Ci y, 10 Ap il 2024. h ps://www.kansasci y ed.o g/Paymen s%20Sys ems%20Resea ch%20B ie-
fings/documen s/10104/Paymen sSys emResea chB iefing24Noll0410.pd
China
e-Yuan only 0.16 % o he China’s M0 (Reu e s 19 July 2023)
T ansac ions using China's digi al yuan hi 1.8 illion yuan ($249.33 billion) a end-June,
he coun y's cen al bank go e no Yi Gang said on Wednesday, ma king a jump om o e
100 billion yuan as o Augus las yea .
The numbe s cemen China's ole as a leade among coun ies ha a e de eloping hei
own cen al bank digi al cu encies (CBDC) - digi al okens issued by cen al banks - al -
hough adop ion is s ill in he ea ly s ages. The e-CNY, as he digi al yuan is called, has so
a been used mainly o domes ic e ail paymen s.
Speaking a a lec u e o ganised by he Mone a y Au ho i y o Singapo e (MAS) in he
Sou heas Asian ci y-s a e, Yi said China's digi al cu ency in ci cula ion eached 16.5 bil-
lion yuan as o end-June.
To al e-CNY ansac ions eached 950 million, wi h 120 million walle s being opened, Yi
said. S ill, e-CNY in ci cula ion accoun ed o only 0.16% o China's M0 money supply, o
cash in ci cula ion, Yi said.
34
"And you can see ha igh now he balance o e-CNY is only coun ing wo- en hs o 1%
o M0, so ha he balance is e y small, bu wi h his kind o balance (we) suppo a big
numbe o ansac ions, which means ha he eloci y is high and mo e e icien ," Yi said.
Chinese s a e-owned banks pa icipa ed las yea in a ial ocused on c oss-bo de ans-
ac ions de eloped by he Bank o In e na ional Se lemen s.
Sou ce: h ps://www. eu e s.com/ma ke s/asia/chinas-digi al-yuan- ansac ions-seeing-s ong-momen-
um-says-cbank-go -yi-2023-07-19/
China is paying some wo ke s in digi al yuan – bu ew a e choosing o use i (Sou h
Chinese Mo ning Pos 13 May 2024)
China's digi al yuan, also known as e-CNY, is ailing o ca ch on du ing a ial in which s a e
employees ecei e hei sala y in he cen al bank digi al cu ency (CBDC), acco ding o a
epo by he Sou h China Mo ning Pos (SCMP).
Mos o he ea ly ecipien s immedia ely ans e he digi al yuan balances o hei bank
accoun s o spend as cash, he SCMP epo ed.
“I p e e no o keep he money in he e-CNY app, because he e’s no in e es i I lea e i
he e,” Sammy Lin, one pa icipan in he pilo , said. “The e a e also no so many places,
online o o line, whe e I can use he e-yuan
Sou ce: h ps://www.scmp.com/economy/china-economy/a icle/3262194/china-paying-some-wo ke s-
digi al-yuan- ew-a e-choosing-use-i
Eas e n Ca ibbean Cu ency Union (ECCU)
DCash only 0.16 % o o al cu ency in ci cula ion
Less han nine mon hs a e he s a o he DCash pilo in 2021, he DCash pla o m wen
down o close o 10 weeks; when se ice was es o ed, a ound 4,000 walle holde s,
oughly 20 financial ins i u ions, and 10 go e nmen agencies ac oss he ECCU we e pa -
icipa ing in he pilo . La e , DCash educa ional campaigns expanded and included in-
pe son demons a ions. By Ma ch 2023, 400 me chan s we e pa icipa ing. O e all,
DCash ci cula ion appea s o ha e g own modes ly om i s ini ial issuance o EC$2 mil-
lion o EC$2.45 million in Ma ch 2023 (ECCB 2022, 2023). This amoun is s ill e y small,
accoun ing o only 0.16 pe cen o he o al cu ency in ci cula ion a he ime.
Sou ce: F anklin Nol, Obse a ions om he Re ail CBDCs o he Ca ibbean, Fede al Rese e Bank o Kan-
sas Ci y, 10 Ap il 2024 h ps://www.kansasci y ed.o g/Paymen s%20Sys ems%20Resea ch%20B ie -
ings/documen s/10104/Paymen sSys emResea chB iefing24Noll0410.pd
35
India
E- upee: “Li e o ganic demand” (Reu e s 25 June 2024)
Usage o India's digi al cu ency, he e- upee, has slumped o jus a en h o he peak hi
in Decembe , ou sou ces said, eflec ing he s uggles se e al coun ies ha e expe i-
enced in ying o gene a e public suppo o digi al cu encies.
The Rese e Bank o India s a ed a pilo o he e- upee, de ised as a digi al al e na i e o
physical cash, in Decembe 2022, and success ully eached a a ge o 1 million e ail
ansac ions pe day by Decembe 2023.
The achie emen came only a e banks we e asked o push up ansac ions by o e ing
incen i es o e ail use s and disbu sing a po ion o bank employees' sala ies using he
e- upee.
Bu now ha he push has diminished, daily ansac ion numbe s ha e allen o abou
100,000, said wo o he sou ces, who a e di ec ly in ol ed in he pilo .
This shows he e is li le o ganic demand o use he e- upee, said a hi d sou ce, a banke
in ol ed in he p ojec .
The sou ces declined o be iden ified because hey a e no allowed o speak o media.
The RBI did no espond o an email seeking commen and he da a on e ail ansac ions
ia he e- upee is no publicly disclosed.
The ansac ions ha a e con inuing a e in pa due o banks disbu sing benefi s o hei
employees ia he e- upee, all ou o he sou ces said.
This has helped o push up ansac ions o abou 250,000 o 300,000 pe day owa ds he
end o each mon h, he wo sou ces ci ed ea lie said
Sou ce: h ps://www. eu e s.com/ echnology/india-digi al-cu ency- ansac ions-slump-a e - eaching-
ini ial-cbank- a ge -2024-06-25/
Inaugu al Add ess by Sh i Shak ikan a Das, Go e no , Rese e Bank o India on Au-
gus 26, 2024
“I is impo an o emphasise ha he e should no be in any ush o oll ou sys em-wide
CBDC be o e one acqui es a comp ehensi e unde s anding o i s impac on use s.”
Sou ce: h ps://www.bis.o g/ e iew/ 240828p.h m
Jamaica
JAM-DEX oughly 0.11 pe cen o o al cu ency
JAM-DEX launched on July 11, 2022; by he end o he mon h, a ound 120,000 indi iduals
and 2,300 me chan s we e epo edly on he JAM-DEX ne wo k ia he Lynk pla o m. The
42
holde p o ided in he o m o elec onic da a. This in angible ea u e is a c ucial poin in
conside ing he di e ences be ween CBDC and cash.
Whe he o issue a e ail CBDC in Japan should be decided by discussions among he
public.
(…) he sha ing o oles be ween cen al bank money and p i a e money as well as p i a e
fi ms' capaci y o esou ce alloca ion and inno a ion should also be alued.
Sou ce: h ps://www.bis.o g/ e iew/ 240306a.h m
Kenya
Cen al Bank o Keyna: Discussion Pape on Digi al Cu ency (Feb ua y 2022)
As is wi h mobile money, he ocus o he assessmen o CBDC inno a ion mus be on
unc ionali y and he p oblem i esol es o he people a he han he unde lying ech-
nology. Whils CBDC o e s oppo uni ies o educe cos s associa ed wi h digi al pay-
men s, i also comes wi h isks pa icula ly ela ed o cybe secu i y and unknowns on how
i would impac cen al banks’ co e unc ions o mone a y policy, financial s abili y and
paymen sys ems o e sigh . Fu he , in he case o Kenya whe e elec onic money has
aken oo , he p oposed alue solu ion o e ed by CBDC seems o be al eady me .
Sou ce: h ps://www.cen albank.go.ke/uploads/discussion_pape s/Cen alBankDigi alCu ency.pd
Cen al Bank o Keyna: Discussion Pape on Cen al Bank Digi al Cu ency: Com-
men s om he Public (May 2023)
Ul ima ely, he ollou o CBDC should no be a ace o be fi s . CBK’s ision is o a pay-
men s sys em ha is secu e, e icien , and widely a ailable o and wo ks o Kenyans.
P esen ly, Kenya’s pain poin s in paymen s can po en ially be sol ed by s eng hening in-
no a ions a ound he exis ing paymen ecosys em. Acco dingly, implemen a ion o a
CBDC may no be a p io i y in Kenya in he sho o medium e m. Howe e , CBK will con-
inue o moni o de elopmen s in he CBDC wo ld and pe iodically assess he need o
CBDC in Kenya.
Sou ce: h ps://www.cen albank.go.ke/wp-con en /uploads/2023/06/Discussion-Pape -on-Cen al-
Bank-Digi al-Cu ency-Commen s- om- he-Public.pd
Ko ea
Ledge Insigh s: Ko ean wholesale CBDC pilo o suppo okenized deposi s (4 Oc-
obe 2023)
Today he Bank o Ko ea (BoK) announced plans o a wholesale cen al bank digi al cu -
ency (wholesale CBDC) pilo in conjunc ion wi h he Bank o In e na ional Se lemen s
43
(BIS). Key mo i a ions o he Ko ean wholesale CBDC include ac ing as a se lemen as-
se o comme cial bank okenized deposi s, and explo ing he BIS’ Unified Ledge con-
cep .
The cen al bank p e iously an e ail CBDC ials bu has concluded he e is no cu en
need o a e ail CBDC, gi en he e icien paymen s landscape. Howe e , i will con inue
o explo e echnology o an o line CBDC and p i acy p ese ing echnologies.23
Sou ce: h ps://www.ledge insigh s.com/ko ean-wholesale-cbdc-pilo - o-suppo - okenized-deposi s-
unified-ledge /
Malaysia
Bank Nega a Malaysia (Cen al Bank Malaysia): Annual Repo 2020
A he momen , he Bank does no ha e any immedia e plans o issue CBDC. In Malaysia,
he financial sys em con inues o suppo he unc ioning o he economy while mee ing
he needs o indi iduals and businesses. To his end, he exis ing mone a y and financial
policy ools ha e emained e ec i e in sa egua ding mone a y and financial s abili y.
Mo eo e , domes ic paymen sys ems, including he RPP con inue o ope a e sa ely and
e icien ly o suppo he needs o he economy and allow eal- ime digi al paymen s.
Sou ce: h ps://www.bnm.go .my/documen s/20124/3026128/a 2020_en_box2_digi alcu ency.pd
Malaysia Financial Sec o Bluep in 2022-26 - A Boos e Fo Digi al Finance (NEW
STRAITS TIMES, 24 Feb ua 2022)
To ca ch up wi h he popula i y o he Cen al Bank Digi al Cu ency (CBDC), BNM will in-
ensi y esea ch and expe imen a ion on he use o CBDC o Malaysia's mone a y and
financial in as uc u es wi h he ini ial ocus on wholesale CBDC, making i clea ha e-
ail CBDC is no on he ada o he cen al bank. CBDC will also be handy in explo ing
eme ging paymen inno a ions o c oss-bo de paymen s, such as he use o mul i-
CBDC a angemen s”
Sou ce: h ps://www.kkd.go .my/dasa -p i asi/233-kkd-news/21482-malaysia-financial-sec o -bluep in -
2022-26-a-boos e - o -digi al-finance
44
New Zealand
Rese e Bank New Zealand: Digi al Cash in New Zealand (17 Ap il 2024)
A he Rese e Bank - Te Pū ea Ma ua, we' e looking a digi al cash. I would be an elec-
onic e sion o cash, issued by he Rese e Bank o New Zealand, bu i would no e-
place cash.
We a e in s age 2 o a mul i-yea , mul i-s age p ocess o conside ing digi al cash. We' e
de eloped some p inciples and design op ions o New Zealand’s digi al cash, and we
wan you o ell us i we ha e go i igh and wha i would mean o you.
The e a e many de ails o wo k ou be o e we can decide i digi al cash is igh o New
Zealand, and we plan o consul again in he u u e on whe he we should go ahead and
issue digi al cash.
Sou ce: h ps://consul a ions. bnz.go .nz/money-and-cash/digi al-cash-in-new-zea-
land/?_gl=1*dmmb z*_ga*MjAyOTcxNzk5OS4xNzE5NTkxODA3*_ga_51JCWD9FGD*MTcx-
OTU5MjU3MS4xLjEuMTcxOTU5MjYwMC4wLjAuMA..#documen s
No way
No ges Bank Pape s: Cen al bank digi al cu ency - final epo o p ojec Phase 4
In summa y, ou assessmen so a is ha wi h espec o he p ecau iona y app oach,
in oducing e ail CBDC is no a e y u gen ma e . The idea ha he in oduc ion o e ail
CBDC is he mos adequa e ins umen o managing isks in No ges Bank's a eas o e-
sponsibili y associa ed wi h new mone a y and paymen sys ems is unce ain as well.
Ne e heless, we canno exclude he possibili y ha highly secu ed s ablecoins in o eign
cu ency issued by, o example, big echs, o CBDC om coun ies wi h significan eco-
nomic ela ions o No way, may be used by No wegian audiences o a ce ain ex en . No -
ges Bank should he e o e pu sue i s assessmen o how o ensu e ha paymen s in NOK
o e equi ed unc ionali y demanded by end use s in he u u e. Re ail CBDC, wholesale
CBDC, o he changes in he se lemen sys em and egula o y ins umen s a e all ele an
in such an assessmen .
Sou ce: h ps://www.no ges-bank.no/con en asse s/ b85d452791d4d1a9 04aa4d3c18683d/no ges-
bank-pape s-2---phase-4---final- epo .pd ? =18122023133556
Philippines
Jan Ma lon A. E angelis a, Bank Ofiice , Paymen s Policy and De elopmen Depa -
men Paymen s and Cu ency Managemen Sec o (25 Ap il 2024)
The e is minimal pe cei ed added alue o he use o e ail CBDC in he Philippines gi en
he p og ess in he implemen a ion o e ail paymen and financial inclusion e o ms.
45
Accoun -based CBDCs may no yield much alue compa ed o cu en e ail paymen in-
s umen s in he Philippines.
Sou ce: h ps://www.bsp.go .ph/Inclusi e%20Finance/EFLP/EFLP2024_1_2c.pd
Poland
NPB Managemen Boa d (May 2021)
The NBP Managemen Boa d has adop ed he ollowing s ance o Na odowy Bank Polski
on he issuance o digi al zlo y:
Fo many yea s Na odowy Bank Polski has been closely moni o ing he p og ess o he
wo k o o he cen al banks on he issue o a new o m o cu ency, i.e., cen al bank digi al
cu ency (CBDC), and i has been e alua ing he needs o he Polish ma ke in his e-
spec . A he same ime, NBP has been ho oughly examining he po en ial implica ions
o CBDC issuance – i s legal, echnological and economic consequences (pa icula ly, o
he unc ioning o he banking sec o , financial s abili y, mone a y policy, and he ope a-
ion o he paymen sys em).
The cu en ci cums ances in Poland do no jus i y he a ionale behind he launching o
he pilo es s on CBDC issuance o digi al cu ency implemen a ion by o he cen al
banks. Un il now NBP has no iden ified a sys emic objec i e o he issuance o digi al
zlo y o any specific needs o consume s o business en i ies ha could no be sa isfied
by paymen se ice p o ide s in Poland bu only h ough he cen al bank h ough he in-
oduc ion o CBDC. The esul s o he analyzes conduc ed show no clea benefi s om
he in oduc ion o cen al bank digi al cu ency in Poland e sus he iden ified isks e-
la ed o i s issuance o he economy, cash ci cula ion and he financial sys em. NBP
akes a p uden app oach o he possibili y o in oducing digi al zlo y and does no cu -
en ly choose o issue i , in he absence o any con incing jus ifica ion. NBP’s cu en
s ance on he issuance o CBDC may be modified should ac o s (domes ic o in e na-
ional) jus i ying such a change eme ge.
Sou ce: h ps://nbp.pl/en/paymen -sys em/s a is ical-da a/analyzes-and-s udies/cen al-bank-digi al-
cu ency/
Singapo e
Mone a y Au ho i y o Singapo e: A Re ail Cen al Bank Digi al Cu ency: Economic
Conside a ions in he Singapo e Con ex (No embe 2021)
“O e all, MAS’ cu en iew is ha he e is no p essing need o a e ail CBDC in Singapo e
a his poin in ime. Demand o cash domes ically emains some way om he
46
“minimum h eshold” whe e conce ns o he nega i e implica ions om he lack o cash
in ci cula ion migh a ise.
MAS’ decision o p oceed wi h u he echnological and policy explo a ions o a e ail
CBDC should no be aken as a commi men o i s issuance. The e a e b oade conside -
a ions o CBDC issuance, such as whe he he public expec s di ec access o cen al
bank money as pa o he social con ac in Singapo e. A he same ime, while he e is
gene al consensus ha money and paymen s a e public goods whose p o ision should
no be le en i ely o he p i a e sec o , he app op ia e “di ision o labou ” be ween he
public and p i a e sec o ul ima ely also in ol es some no ma i e judgemen .
Sou ce: h ps://www.mas.go .sg/-/media/MAS/EPG/Monog aphs-o -In o ma ion-Pape /A- e ail-CBDC---
Economic-Conside a ions-in- he-Singapo e-Con ex .pd
Sweden
The s a e and he paymen s: Summa y o he epo o Be alningsu edningen, S ock-
holm 2023
The Inqui y he e o e does no cu en ly see su icien ly s ong socie al needs o he Riks-
bank o issue an e-k ona. Gi en ha de elopmen is occu ing apidly, economic, poli ical
and echnological changes may p omp a new assessmen .
Sou ce: h ps://www. ege ingen.se/con en asse s/c01377c 65424c 0b12add 64c04374a/english-sum-
ma y- he-s a e-and- he-paymen s.pd
S e iges Riksbank: E-k ona – s a e money in digi al o m
Whe he o no o in oduce an e-k ona in Sweden is ul ima ely a poli ical decision. An
inqui y in o he ole o he s a e in he paymen ma ke , p esen ed in Ma ch 2023, as-
sesses ha he e is cu en ly insu icien social need o he Riksbank o issue an e-k ona.
Howe e , global changes may lead o a di e en assessmen in he u u e. In i s consul-
a ion esponse, he Riksbank poin s ou ha wo k on de eloping legisla ion o a possible
e-k ona needs o begin now, so as o sho en he implemen a ion pe iod i he launch o
an e-k ona becomes ele an la e .
Sou ce: h ps://www. iksbank.se/en-gb/paymen s--cash/e-k ona
Swi ze land
Speech by Thomas J. Jo dan: Towa ds he u u e mone a y sys em. In oduc o y e-
ma ks, e en 'Towa ds he u u e mone a y sys em', Zu ich (8 Ap il 2024)
Some cen al banks a e also explo ing he issuance o a digi al o m o cash as a e ail
paymen ins umen . The SNB cu en ly sees no need in Swi ze land o such digi al cen-
al bank money o he gene al public, also known as e ail CBDC. Consume s and
47
businesses al eady ha e access o a wide ange o e icien and inno a i e paymen in-
s umen s o e ed by he p i a e sec o . Re ail CBDC could undamen ally al e he cu -
en mone a y sys em and he ole o cen al banks and comme cial banks, wi h a -
eaching consequences o he financial sys em. F om a Swiss pe spec i e, he isks o
e ail CBDC cu en ly ou weigh i s po en ial benefi s.
Sou ce: h ps://www.snb.ch/en/publica ions/communica ion/speeches/2024/ e _20240408_ jn
Taiwan
Cen al bank Depu y Go e no Chu Mei-lie (Taipeh Times, 8 Decembe 2023)
Taiwan’s cen al bank is p uden ly app oaching he issue and has no ime able on when
o each a conclusion, she said.
Sou ce: h ps://www. aipei imes.com/News/biz/a chi es/2023/12/08/2003810290
Taiwan c.bank says no ime able o launching digi al cu ency (Reu e s 7 July 2024)
Taiwan's cen al bank said on Sunday ha i has no ime able o launching a digi al cu -
ency, wa ning he p ocess will be "huge and complex", bu i will hold public hea ings on
he ma e nex yea o sp ead knowledge.
Sou ce: h ps://www. eu e s.com/wo ld/asia-pacific/ aiwan-cbank-says-no- ime able-launching-digi al-
cu ency-2024-07-07/
Thailand
Bank o Thailand: Pilo P og am, Re ail CBDC Conclusion Repo (Ma ch 2024)
In a nu shell, he BOT en isions ha CBDC can os e compe i ion among FSPs, enable
new financial inno a ions, and make mo e capable and cos -e icien se ices a ailable
o he public in he u u e. None heless, challenges associa ed wi h Re ail CBDC emain
such as use adop ion, as well as i s consequences on he business models o FSPs.
Meanwhile, he alue-added benefi s o CBDC emain unclea o many cen al banks,
leading hem o designa e hei espec i e CBDC plans as long- e m endea o s.
A p esen , he BOT has no immedia e plan o o icially issue Re ail CBDC, bu he BOT
will use he esul s om he pilo , especially insigh s ela ed o he echnology design, o
apply o new a eas and u u e s udies on enhancing he paymen sys em.
Sou ce: h ps://www.bo .o . h/con en /dam/bo /documen s/en/financial-inno a ion/cbdc-digi al-cu -
ency/ CBDC%20Conclusion%20Repo .pd
48
Uni ed Kingdom
T easu y Commi ee, O al e idence: Bank o England Financial S abili y Repo s, HC
140, Monday 16 Janua y 2023
And ew Bailey (Go e no a he Bank o England): “I am no con inced abou some o he
p oblems ha we migh be ying o sol e. I am no necessa ily con inced ha he e ail
paymen sys ems need his so o upg ade a he momen .
F ankly, I am s ill hinking ha d abou his, and he hing ha I come back o is ha i he e
is a demand o e ail digi al money—i he e is a demand o s ablecoins—and we mus
se he s anda d e y high because o he need o ce ain y o alue o s ablecoins, is i
ac ually di e en om a cen al bank digi al cu ency? Should we make ha dis inc ion,
o no ? I emains o me an open ques ion.
F om he Bank o England's poin o iew, ou main mo i a ion o a e ail CBDC would be
o p omo e he singleness o money by ensu ing ha he public always has he op ion o
going in o ully unc ional cen al bank money ha can be used in hei e e yday li es. We
ha e se ou a numbe o a gumen s o why his migh be needed in ou consul a ion pa-
pe . Bu we do no ye know i we'll defini ely need o do i – his will depend on how ends
in money and paymen s play ou .
Sou ce: h ps://commi ees.pa liamen .uk/o ale idence/12520/pd
House o Commons T easu y Commi ee: The digi al pound: s ill a solu ion in sea ch
o a p oblem? Fi s Repo o Session 2023–24
58. T he e a e some po en ial benefi s o he UK economy om a digi al pound. A digi al
pound could help suppo inno a ion in domes ic paymen s, while gua ding agains some
o he isks posed by new o ms o p i a e digi al money by main aining public access o
a o m o cen al bank money. Inno a ion b ough abou by a digi al pound could also sup-
po he UK’s in e na ional compe i i eness in paymen s (and ela ed) echnologies, pa -
icula ly i i is amongs he fi s majo cen al banks o issue a e ail CBDC. The ex en o
hese benefi s is unclea , howe e . No is i ye clea ha a digi al pound is he only (o
bes ) means o achie ing hem.
60. Building he in as uc u e needed o a digi al pound would also likely be e y expen-
si e, and he e en ual decision on whe he o launch a digi al pound will need o be sub-
jec o a igo ous cos -benefi analysis. The Bank o England and T easu y mus app oach
his analysis om a neu al s ance— he launch o a digi al pound mus no be iewed as
an ine i able consequence o in es ing in u he de ailed design wo k. The policy ques-
ion mus emain ‘why do i ’ a he han becoming one o ‘why no do i ’.
Sou ce: h ps://commi ees.pa liamen .uk/o ale idence/12520/pd /
49
Uni ed S a es
On he websi e o he Boa d o Go e no s o he Fede al Sys em: Has he Fede al Re-
se e decided o c ea e a CBDC?
The Fede al Rese e issued Money and Paymen s: The U.S. Dolla in he Age o Digi al
T ans o ma ion as a fi s s ep in os e ing a b oad and anspa en public dialogue abou
CBDCs in gene al, and abou he po en ial benefi s and isks o a U.S. CBDC. The pape
is no in ended o ad ance any specific policy ou come and no decisions ha e been made
a his ime. The Fede al Rese e has made no decision on issuing a cen al bank digi al
cu ency (CBDC) and would only p oceed wi h he issuance o a CBDC wi h an au ho izing
law. Tes i ying be o e he House Financial Se ices Commi ee in Ma ch 2023, Chai Pow-
ell said a cen al bank digi al cu ency is, “some hing we would ce ainly need Cong es-
sional app o al o .”
Sou ce: h ps://www. ede al ese e.go /cbdc- aqs.h m
Je ome Powell es ifiying be o e Cong ess on Ma ch 7 2024 (Reu e s)
Fede al Rese e Chai man Je ome Powell significan ly downplayed he possibili y o he
cen al bank issuing i s own digi al cu ency, and said i i e e came o pass, he go e n-
men would play a limi ed ole. Tes i ying be o e Cong ess Thu sday, Powell said policy-
make s we e "nowhe e nea " aking ac ion on adop ing such a ool.
“People don’ need o wo y abou a cen al bank digi al cu ency, no hing like ha is e-
mo ely close o happening any ime soon," he old he Sena e Banking Commi ee.
He added ha he Fed has no in e es in es ablishing accoun s o indi iduals ha would
compe e wi h he banking sys em, and i would no suppo any Fed moni o ing o pe -
sonal financial ansac ions.
"I we we e o e e do some hing like his, and we’ e a e y long way om e en hinking
abou i , we would do his h ough he banking sys em, he las hing...we he Fede al Re-
se e would wan would be o ha e indi idual accoun s o all Ame icans," he said.
Sou ce:h ps://www. eu e s.com/ma ke s/us/powell-says- ed-no - emo ely-close-cen al-bank-digi al-
cu ency-2024-03-07/
i
Imp in
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