A BBVA executive has raised concerns about any potential digital euro, questioning what customer demand it would meet and warning that it would have to allow private players to develop related business models.
While plans to introduce a digital euro are still at a conceptual stage, the idea has been gathering momentum in recent months, with many banks - including BBVA - participating in pilot projects.
Speaking at a European Banking Federation seminar, Pablo Urbiola, from BBVA’s digital regulation team, urged a "cautious and pragmatic approach".
He told his audience: "Although it is hard to argue that a digital euro is needed at the moment, there are good reasons for the ECB to explore the possible issuance of a digital currency, and to be ready to make such a move should the need arise in the future."
However: "Considering all the innovation that is taking place in the payments market, it is not clear which customer demands a digital euro could fulfil that may not be fulfilled by other initiatives."
If a digital euro is developed, "the ECB should rely on public-private cooperation, leveraging the strengths of all players," said Urbiola, adding that "it is essential that the general framework designed by the ECB is flexible enough, and that allows private players to develop business models in a competitive space".
The Bank for International Settlements this week stressed the importance of a public private partenrship in CBDC developments, with the central bank ensuring the stability of the infrastructure and banks and fintechs competing in customer-facing service provision.