The Euro Banking Association (EBA) has released a report discussing the impact that a digital euro could have on banks and the European payments industry.
‘The Digital Euro—A guide for banks and other supervised intermediaries’ outlines how a digital euro could influence the role of banks in the retail payments market and measures that banks and supervised intermediaries could take.
The report was conducted by the EBA’s digital currencies and smart payments working group, consisting of experts from the EBA community and banking and fintech industry guest speakers. The group held five discussion meetings between 2022 and 2023, the findings of which are summarised in the paper.
Views of the European Central Bank (ECB) on use cases and responsibilities around the digital euro are outlined, along with an overview of the current investigation phase and the major design choices made by the ECB and the Eurosystem as of March 2023.
Three options are identified by the report as possible ways for banks and supervised intermediaries to deal with the digital euro, namely “ensure compliance”, “absorb and adapt” and “expand business”. Advised actions and risks for each of these options are provided, along with ways for the banking industry as a whole to move forward.
Andrea Meier, chair of the working group, says: “Banks and other supervised intermediaries should proactively investigate the impact that the introduction of the digital euro will have on their business if they have not done so already. They should focus on mitigating risks and actively collaborating with other participants in the market to identify and benefit from potential network effects.
“We recommend that banks and other supervised intermediaries define a strategy for the digital euro in the near future.”
