Per Callesen: Should the EU launch a digital euro?

Speech by Mr Per Callesen, Governor of the National Bank of Denmark, at the Europa Think Tank's webinar on the digital euro, 23 April 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you for inviting me to speak at the EUROPA Think Tank's webinar.

I won't be using the expression "digital euro", as it doesn't capture the essence of the issue. Private individuals and corporations hold digital deposit accounts at private banks. Private banks in the euro area all hold digital deposit accounts at the European Central Bank, ECB. In other words, deposits and the payment system are already highly digitalised. So, the ECB issues large volumes of digital currencies, if that is what you prefer to call deposit accounts. What's new is not the digital aspect, but rather whether private individuals and non-financial corporations should have a deposit account – or something resembling a deposit account – with a direct claim on the central bank. The most correct expression would be "retail CBDC", that is: a central bank digital currency for retail customers.

Neither the ECB nor other central banks have decided whether they want this or not. It could be very large scale or very small scale. The conclusion seems to be that it will be small scale, but not very small scale. In autumn 2020, the ECB produced an excellent report on this topic, which is well worth reading in its entirety. Chapter 3 provides a thorough review of the issues of this product, and the ECB and others have subsequently spoken publicly about how they imagine these issues to be addressed, if necessary. Although no decision has been made, this possible way of addressing the issues gives us the opportunity to interpret what we're talking about: