ECB’s Panetta: Digital Euro to Promote Resilience in Payments, Not Instability

23 November 2023

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Fabio Panetta on Thursday said that the digital euro would not be a disruptive force in payments.

In a speech at a conference at the ECB, a text of which was posted to the website of the Banca d’Italia, which he heads Panetta said that the digital euro ‘would maintain healthy competition in digital payments, thereby promoting the overall resilience of the financial sector.’

‘Unlike the potentially disruptive changes expected from large technology firms vying for dominance in digital payments (and, potentially and more broadly in financial services, at a later stage), the issuance of a digital euro will not cause instability in the financial system’, he said.

The digital euro could have a central role in digital payments, he said, with advantages that ‘would be amplified in the context of the potential disruption caused by a handful of large technology companies seeking to dominate the payments market’, he said.

‘As the large technology companies further expand into digital finance, the availability of digital central bank money, together with effective regulation, would become necessary to ensure competition, privacy and the smooth functioning of payments and the financial intermediation process’, he said.

It was important, however, to acknowledge that ‘regulation alone cannot replace the essential role of public money and the confidence it inspires’, he said.