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Designing an inclusive digital euro
Journal of Payments Strategy & Systems,
16
(2),
137-147
(2022)
Abstract
This paper discusses how the introduction of a digital euro could motivate those Europeans who are yet to open a transaction account, or who are yet to adopt digital payments, into doing just that. The paper argues that this will require central banks to emphasise the risk-free nature of central bank digital currency. In addition, payment transactions need to be made less expensive and more user-friendly than those offered by private intermediaries. The paper explains the benefits of adopting a digital currency instead of relying on cash alone, such as the ability to send and receive payments remotely, improved security, and greater transparency vis-à-vis historical transactions. After discussing the key design features that a digital euro might adopt, the paper concludes that an account-based digital euro could have a greater impact on financial inclusion than a token-based euro. The more that digital euro accounts are integrated into existing payment systems, the greater the benefits will be.
Keywords: digital euro; central bank digital currency; electronic money; payment innovation; payment instrument; financial inclusion
The full article is available to subscribers to the journal.
Author's Biography
Ludovica Galotto is an economist and payments expert in the Bank of Italy’s Department of Financial Education. Her previous experience includes positions at the United Nations Environment Programme and the National Agency for Public Procurement. Her professional interests include payment systems, financial education, the green economy and economic inequalities. She holds a master’s degree in economics with honours from La Sapienza University of Rome.
Maria Iride Vangelisti is a Director in the Financial Education Department of the Banca d’Italia. She is currently involved in the activities of the Global Partnership for Financial Inclusion. Previously, she worked for more than 20 years in the Payment System and Services Department of the Banca d’Italia, participating in numerous working groups at the Bank for International Settlements and the European Central Bank. Her work on payment issues has been published widely and she recently co-wrote a book with Riccardo De Bonis, entitled ‘Moneta. Dai buoi di Omero ai Bitcoin’ (Il Mulino, 2019).
