The Veblen Institute for Economic Reforms recommends a public service option for the ECB in the introduction of a digital euro, in a study published on Tuesday 17 January and commissioned by The Left group in the European Parliament.
The Paris-based think tank warns against the sole use of private intermediaries, as such a solution would not, in its view, make the digital euro an absolutely secure, inclusive and free means of payment for users and fully respect their personal data.
“The main argument against the public option is that it could lead to massive deposit flights from commercial banks, with dire consequences for the universal banking model (...) We claim these concerns are overstated”, say the authors of the study.
According to them, “market driven provision of means of payment have shown their limits: the cash infrastructure is decaying and the payment cards infrastructure yields sub-optimal socioeconomic outcomes”.
In the statement reaffirming its political support for the ECB-led digital euro project that it adopted on Monday (see EUROPE 13100/4), the Eurogroup believes that the ecosystem of the future central bank currency “should leverage the strength and experience of public and private participants and build on European infrastructure”. “Whilst further work is needed on the precise allocation of competencies, we consider that supervised intermediaries could play an important role in the digital euro ecosystem,” it adds.
See the Veblen Institute for Economic Reforms study: https://aeur.eu/f/4y1 (Original version in French by Mathieu Bion)