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Can the Digital Euro be made attractive to all key stakeholders?
Journal of Digital Banking,
9
(3),
238-258
(2024)
Abstract
This paper explores the challenges and opportunities related to the adoption of central bank digital currencies (CBDCs), with a particular focus on the Digital Euro. It critically examines the motivations behind the introduction of the Digital Euro, addressing the often unclear problems it is intended to solve. The paper emphasises the necessity of motivating key stakeholders, especially commercial banks, consumers and merchants, to support and use the Digital Euro. It argues that simply mandating adoption is insufficient for success; instead, intrinsic motivation and clear business cases for each stakeholder group are essential. The paper also highlights the potential risks and unintended consequences of the Digital Euro, particularly its impact on commercial banks and the broader economy. Additionally, the paper proposes that an offline CBDC, resembling a modern form of cash, might offer a viable path forward, providing benefits such as increased financial inclusion and enhanced privacy. Ultimately, the reader can expect to gain insights into the complexities of CBDC adoption, the strategic considerations for different stakeholders and the potential models for making the Digital Euro a success.
Keywords: Central Bank Digital Currency (CBDC); Digital Euro (D€); payments ecosystem; stakeholder motivation; offline payments; finance innovation; digital finance policy; financial inclusion
The full article is available to subscribers to the journal.
Author's Biography
Michael Salmony Dr Michael Salmony is a globally recognised expert in digital and financial services, specialising in Payments, Open Finance/PSD2, FinTech, Digital Identity, e-Invoicing/SCF, AI for Financial Services and Electronic Money/CBDC. He specialises in strategic business innovations and advises major international banks, industry associations, regulators and finance bodies around the globe. Dr Salmony has held advisory roles in many important decision-making bodies (eg European Commission/ European Central Bank/European Parliament in Europe and central banks from Japan to Uruguay and Kazakhstan). He has served for more than ten years as Executive Adviser to the Board of Worldline Financial Services, playing a pivotal role in transforming it into the world’s fourth-largest financial processor. Dr Salmony’s expertise is also sought by regions where financial innovations are currently emerging — for example, with the World Bank in Central Asia, as Board Member of FinTech Africa, as Advisory Board Member to Mastercard in Latin America and as strategic partner to FinTech Associations in Europe, Turkey, Japan and Africa. Dr Salmony is a respected voice in international media, including the Financial Times, Harvard Business Manager and The Economist. He has also published much original work in top-level academic and industry journals, which has been translated into over 10 languages. He also teaches at Oxford Business School and other leading universities worldwide, where his work on AI in FinTech, open finance and digital currencies is highly regarded. Dr Salmony holds a degree from the University of Cambridge.
