Reservations about a potential digital euro – some of which have veered toward conspiracy theory territory – show there is no pressing need for one in the European Union, Bank of Spain Governor Pablo Hernández de Cos said during a Monday speech.
Although the European Central Bank’s digital euro project is important, the European and Spanish payment systems are “highly efficient,” and so central bankers are “pushing ahead with our analysis with the utmost caution,” he said.
The ECB’s central bank digital currency (CBDC) project, exploring the issuance of a digital version of the euro for retail payments, took off at great speed but slowed with legislative proposals earlier this year, and central bankers face political opposition. Criticism included legitimate concerns about privacy and spiraled into conspiracy theories about a digital euro playing a part in a plan to widen state control.
A CBDC should be designed to mitigate any risk to financial stability and monetary policy, Hernández de Cos said.
“I am fully aware that, in its current state, this initiative raises many questions both for society in general and for the financial industry … In these circumstances, issuing a digital euro is not naturally perceived to be a pressing need,” he said.
That doesn’t mean work on a digital euro should stop, the governor said. In November, the project entered a
