ECB must gauge digital euro’s impact on banks before launch - Bank of Spain official

In a speech published on the Bank of Spain’s website, Delgado stated that the digital Euro could address two main developments in the market, the increased amount of digital payments mean there is a need to ensure that citizens can still use central bank money in a digital world, and with the increasing numbers of digital assets a digital euro would provide a payment solution based on European infrastructure and accepted throughout the entire euro area.

Despite these positives, Delgado argued: “The issuance of a digital euro should not be in detriment to the stability of the financial system.” She furthered that “we cannot ignore the elements that might impact the competitiveness and profitability of the banks."
Throughout her speech, Delgado placed an emphasis on financial stability, stated: “We are committed to finding the right balance between safeguarding our financial system and making sure the digital euro adequately covers the needs of the users.”

The ECB are due to decide whether to continue their plans with the digital Euro in October.

Delgado highlighted the belief that there is enough room for a digital euro and private payment solutions to co-exist. This follows from the European Commission's legislative proposal which highlighted the digital euro as being compliant to cash and not a replacement for it.

Delgado added: “Our aim is to design a basic means of payment. It will be up to the intermediaries to add on it by building value-added services, if they so wish. In fact, our expectation is that the digital euro enables the development of new pan-European payment and financial services by the private sector, making it easier to compete with non-European solutions. Ultimately, a digital euro should stimulate innovation, foster competition and enhance resilience in the European payments market.”