MADRID, 25 Ago. (EUROPA PRESS) –
The deputy governor of the Bank of Spain, Margarita Delgado, has defended this Friday that the objective of the digital euro “is not to displace” private payment solutions, but to increase the number of options available to users to make payments, so believes that there is “sufficient space” for the digital euro and these payment solutions to coexist.
In addition, in his speech at the V European Summer Courses organized by the Diario de Navarra Foundation and Equipo Europa in Pamplona, Delgado asked not to forget that the objective of the Eurosystem is for the digital euro to be a “basic” means of payment and that Therefore, it will be up to the intermediaries to “complement it by creating value-added services, if they so wish”.
“We hope that the digital euro will enable the development of new pan-European financial and payment services by the private sector, allowing it to compete with non-European solutions. Ultimately, a digital euro should drive innovation, encourage competition and improve the resilience in the European payment market”, he defended.
Delgado has indicated that the digital euro would serve to respond to the development of digital payments, ensuring on the one hand that citizens can use money from the central bank, even in a digital world, and offering a payment solution based on a European infrastructure and accepted throughout the euro zone.
He has defended the relevance of the study on the digital euro that is being carried out given the increase in the use of digital payment methods, while recalling that the job of supervisors is to ensure financial stability, for which reason he has pointed out the importance to identify and measure the impact that the digital euro may have on the banking system before making a final decision on its use.
In this sense, he has referred to the hypothesis of establishing a limit of digital euros at 3,000, a conclusion supported by the European Commission and that would be in accordance with the needs of retail users, while avoiding negative effects on the financial system.
However, he stressed that this is a preliminary analysis, a “working hypothesis” and that, furthermore, the ECB cannot yet make this decision “so far in advance”. “The determination of the holding limit will be strongly conditioned by the economic context at the time of issuance, so it is necessary to carry out more analysis and take the corresponding decision on this issue closer to the date of issuance” , he has indicated.
Regarding data processing, he indicated that citizens “must be sure” that their privacy will be guaranteed with the digital euro.
Likewise, he stressed that the digital euro project would first consolidate its use in its primary market, that is, the euro area, before “venturing to others”, something that would help minimize the possible distortions that a “rush adoption” could produce ” of the digital euro abroad for those jurisdictions and for the balance of the Eurosystem.
Regarding the possibility of making retail payments in which there is a currency conversion, Delgado has indicated that the regulation does not make any mention. “However, the Eurosystem is willing to explore these functionalities in cases where there are mutual interests with other jurisdictions,” he added.
Lastly, the deputy governor of the Bank of Spain stated that the Eurosystem, in the digital euro project, has been paying attention not to create material barriers that could encourage exclusion.
On the interest rate policy of the European Central Bank (ECB), Delgado has indicated that, despite the fact that inflation has continued to decline, it is still expected to remain “too high for too long.” Thus, he has indicated that the year-on-year inflation rate in the euro area stood at 5.3% in July 2023, compared to the 5.5% registered in June. A year earlier, the rate was 8.9%.
“Inflation is expected to continue to decline during the rest of the year, but remain above the target for a long period,” he said, before recalling that core inflation remains at “high” levels.
In this way, Delgado has affirmed that the ECB’s governing council will continue to apply a “data-dependent” approach.
