The Eurogroups views on the international aspects of CBDCs
The Eurogroup in an inclusive format exchanged views on the international aspects of CBDCs and on the progress of the digital euro project.
The discussion was based on an issues note, presentations by the institutions and an update by the Swedish minister for finance, Elisabeth Svantesson, on the state of play of the e-krona project.
An increasing number of central banks are actively exploring the possible introduction of
a Central Bank Digital Currency (CBDC).
Several central banks have already launched pilots or issued a CBDC, with varying levels of ambition. The reasons cited for exploring a retail CBDC encompass changes in payment preferences accelerated by the Covid pandemic and the emergence of stablecoins and other cryptocurrencies for cross-border payments. This is especially the case in advanced economies where preserving the availability of public, central bank, money is considered an additional motivation. In parallel to these trends in retail payments, work on wholesale CBDCs is also advancing, for instance for the settlement of securities and to enhance efficiency of cross-border payments.
Whilst CBDC projects thus far focus on addressing needs of domestic users, there is a
relevant international dimension to these projects. This includes considering the use of these currencies beyond their home jurisdiction to facilitate cross-border transactions and foster the international role of their currencies. Work is also ongoing on options for interlinking different CBDC projects to support cross-currency payments. The BIS, FSB, IMF, G20 and G7 are promoting cooperation in this new area and aim to find common solutions to the challenges it entails.
Digital euro
Eurogroup discussions focused on the policy aspects and design options for a digital euro.
The Eurogroup statement of January 20235 underlined that “interoperability with other CBDCs, especially within the EU, is an important feature of the digital euro, including for cross-currency transactions. This will also take into account the development of CBDCs by other jurisdictions, in order to reap the potential benefits of faster, cheaper and safer cross-border transactions. On the other end, the risks associated with the use of a digital euro outside the euro area must be mitigated and monitored.”
Source:
https://media.licdn.com/dms/document/media/D4E1FAQFdkQMSVVPqrQ/feedshare-document-pdf-analyzed/0/1684353270438?e=1686182400&v=beta&t=pPSHv_WnMhGozmP1XUidj_ZG0JhJYHUWNWRR5DOu1n8
https://media.licdn.com/dms/document/media/D4E1FAQFdkQMSVVPqrQ/feedshare-document-pdf-analyzed/0/1684353270438?e=1686182400&v=beta&t=pPSHv_WnMhGozmP1XUidj_ZG0JhJYHUWNWRR5DOu1n8