An executive at Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) has raised concerns about the potential digital euro and questioned what customer demands the CBDC would meet. Pablo Urbiola of BBVA’s digital regulation team has called on European financial authorities to carefully explore the possible issuance of a central bank digital currency (CBDC). Central banks across countries are actively working on digital currencies mainly to ward off competition from cryptocurrencies.
“It is not yet exactly clear what kind of customer demand the digital euro is supposed to meet.”
BBVA’s executive Urbiola, speaking at a European Banking Federation seminar, said that despite the increasing need for a European CBDC, it is not yet exactly clear what kind of customer demand the digital euro is supposed to meet. “Considering all the innovation that is taking place in the payments market, it is not clear which customer demands a digital euro could fulfill other initiatives may not fulfill that,” the executive said. The Spanish bank’s executive emphasized that the European Central Bank should consider all the opportunities and risks of a digital euro, considering different design options.
ECB wants to address the myriad challenges associated with the digital euro.
BBVA executive further said that the ECB wants to address the myriad challenges associated with the digital euro: “For instance, if a digital euro aims to respond to the decreasing use of cash, it should be designed as an electronic version of cash — that is, simple, easy to use, with basic functionality.” But if a digital euro aims to ward off the threat of digital foreign currencies, “it should be able to replicate some of the more advanced functionalities of these initiatives,” he concluded.