I have for you today a few interesting things that others said about retail central bank digital currency (CBDC). Let me quote here.
“If the work with the commercial bank is successful, I would need a lot of convincing that the use case was made to introduce a retail central bank digital currency”. Who said that? The Governor of the Bank of England in July 2025. And that very much echoes what the rapporteur just said.
“There is currently insufficient social need for the Riksbank to issue an e-krona. The Riksbank is therefore prioritizing work on improving the possibility of making offline payments”. That’s the central bank of Sweden in March 2025.
“The bank is scaling down its work on a retail central bank digital currency and shifting its focus to broader payment system research and policy development”. The Governor of the Bank of Canada in September 2024.
“A retail CBDC would create non-trivial challenges for financial stability and monetary policy implementation. We are yet to see a strong public policy case emerge”. The Governor of the Bank of Australia in September 2024.
I will stop the statements here and just ask a simple question, very much like the one Christophe Bories and the rapporteur just mentioned : “Why is the European Central Bank forging ahead while all the central banks in all the OECD have put the retail CBDC on pause?”
Why? Well, there are two explanations that come into discussion, and I would like to tackle them both this morning : (a) the sovereignty in payments, and (b) what can we do against the stablecoins.
Sovereignty in payments
We are looking for consensus, and there is a consensus : we all agree that we need European sovereignty in payments. As you know, some countries in Europe have achieved that sovereignty, and France is one of them thanks to great assets : Carte Bancaire, Wero. It exists, and if, let’s say, some partners were to shut us down, we could continue paying in France. The infrastructure is there. So, as the rapporteur mentioned, it’s just a question of the private sector providing the solutions in some of the countries. And they are on the way : there are 45 Instant Payment schemes already operating in Europe.
It is true that they are not all interoperable, but they’re working on it. Our colleague from Wero will talk about this later on, but there is an alliance, signed on June 2025 and that already has covered 15 European countries covering 84% of the population. So, give us some time and, in three years’ time and hopefully we will have even broader coverage. And 84% is more than 0% for the digital euro right now.
So, these private tools are up and running, and they will provide a more complete solution to the European sovereignty than the digital euro, even if it works, because the private sector solutions cover the whole European Union whereas the digital euro can only cover the eurozone. And the sovereignty of Poland, and some other European countries that are not in the eurozone, is just as important as the sovereignty of the eurozone countries.
And the rapporteur mentioned, the private solutions can be deployed more economically than the digital euro. There are figures flying around, but let’s say (here I am quoting the rapporteur and not the PWC study) we are talking of tens, twenties of billions euros. That is a lot of money for something that is already in place. Just to put that in perspective, the European defense industry program is only 1.5 billion. So, we are talking of an infrastructure that is not necessary, and that will crowd out necessary investments for our sovereignty
And (here again I quote the rapporteur) private solutions are cheaper, faster, sovereign. Why not to like about them?
Some say that these solutions are marginal, that a huge majority of payments are still done by international credit schemes. That is right, but it is not a matter of market share: it is a matter of adding an infrastructure that is ready if something bad happens. And this infrastructure exists.
Some say that the private sector is going to sell the assets to somebody else at some point in the future. Well, I understand, and my colleagues from the Treasury can confirm, that if anybody in the European Union is selling strategic assets to a foreign party, it can be blocked by the government. So, I think this remark is moot.
Some say it has never worked before. Well, that is fair enough, but why would it work this time? Because times have changed. It is going to work, and it is already working. So, it is just a matter of time, and as the rapporteur said, give some time to the private sector. In 2028, it will not be 84% of the population, it will be much more than that.
There are some use cases that may not be covered, for example, the resilience, the offline euro that the rapporteur mentioned. It exists in France (CB is able to do this), but maybe there will be a lack of private sector solutions in these very focused use cases, and then it is a case of a market failure which can be addressed by public response. But that is not the general idea of the digital euro, as it is put on the table by the European Commission and the ECB.
Can the digital euro help to resist the stablecoins in dollar ?
No, not at all.
The digital euro is a public instrument, it is centralized, it is based on fiat money. A stablecoin is private, it is built on a ledger, on a blockchain, and it’s vouched against real assets. The digital euro is the exact opposite of a stablecoin. I don’t understand why anybody interested in a stablecoin would shift to something that is the exact opposite of it.
To me, the digital euro looks like bringing a big bucket of water to an oil fire: it is not going to work. If you bring water to an oil fire, you’re going to spread it more.
Let me quote Martin Wolf, journalist in the Financial Times, who wrote an editorial about stablecoins on Tuesday: “What should other countries do about stablecoins in dollar? European countries need to consider how they might introduce stablecoins in their own currency that are more transparent, better regulated, and safer than what the U.S. is more likely to produce.”
So, the answer to stablecoins is stablecoins, not the digital euro.
This was my coverage of the first two questions: I am doubtful about the contribution that the digital euro can bring to payment sovereignty and to the resistance to stablecoins.
The risks that the digital euro represents for financial stability in Europe
The digital euro will raise fundamental questions about the public’s perception of money. Honestly, nobody knows, outside this room, what is the difference between a commercial euro and a central bank euro. According to the Bank for International Settlements, this is one of the three key tests of a currency. The three tests are singleness, elasticity, and integrity.
Singleness describes the need for all forms of a given money to be exchangeable with one another at par, at all times. This is a foundation of trust in money. What will be the consequences of emphasizing to the public, or even revealing to most European citizens, the difference between central bank money and commercial money? The singleness works because there is no difference. And now, you will have in your hand a digital euro, a digital central bank euro and a digital commercial euro. If there is singleness, why are there two? And what will be the reaction of European citizens in the time of crisis? How will they behave when we have highlighted to them the difference between central bank money and commercial money?
My colleague Laurent Quignon has written an excellent paper in Revue Banque, and I strongly encourage you to read this paper, along with the paper that the rapporteur wrote this summer. These are two “must-reads’, if anybody is interested in the digital euro discussion. I have not time enough to get into all their arguments, but let me give a quick historic experiment on this one.
When were limitations on the withdrawal of central bank money implemented in history?
- Argentina, 2001 : cash withdrawals capped at 250 pesos dollars per week per account.
- Greece: ATM withdrawals strictly limited to 60 euros per day per account.
- United States, 1933 : national bank holiday closing all banks for one week, and during this time, no withdrawals were permitted.
The only examples I could find for limitations on the withdrawal of central bank money were during moment of economic stress : governments and central banks imposed these limitations to prevent banking runs and financial instability.
So, I see financial crisis; I see limitations on the withdrawals of central bank money; I see the digital euro. I think this should give us some pause. Are we not creating a tool that will have unintended consequences and at least a big impact on the financial stability and liquidity.
To end my metaphor and my speech: creating the digital euro is playing with fire; a kill switch like the holding limit is not enough; you need to devise the digital euro, if anything, on specific use cases so that you can limit the impact. As the rapporteur mentioned, limiting it to use cases like offline makes a lot of sense in order to stop playing with fire.
Thank you.
