Gabriel Makhlouf: Digital money

Blog by Mr Gabriel Makhlouf, Governor of the Central Bank of Ireland, 29 July 2021.

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

Money has a key role in society and the economy. It has three key functions: a medium of exchange for purchasing goods and services, a unit of account and a store of value. People must have confidence in the money they hold to meet these functions and also in the work of central banks whose job it is to look after the currency.

Money and Central Banks

Earlier this month, the ECB decided to proceed with investigating the potential for creating a digital euro. This follows our report last year which set out our initial analysis on the topic. A key objective of our work will be to preserve the public good that the euro currently provides to citizens (costless access to a simple, universally accepted, risk-free, trusted means of payment) while being ready for change in view of the decrease in cash usage and increased digitalisation. We have a responsibility to consider these issues to ensure money remains fit for purpose as a public good. And although we haven't decided whether a digital euro will be introduced, I think it's very likely to happen. In my view, it's not a question of "if" but rather "how and when". To be clear, cash won't disappear; a digital euro will complement it.