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MNI BRIEF: CBDC Key To Policy Transmission, Stability: Panetta

(MNI) Frankfurt

The creation of a digital euro is key to preserving the monetary transmission mechanism by maintaining a well-functioning payment system, ECB Executive Board member Fabio Panetta said in a speech Tuesday, but he he noted such a move carries significant potential implications for financial stability.

Among the challenges posed by a central bank digital currency (CBDC) significant shifts from bank deposits into CBDC, abrupt changes in the structure of the financial system and increased latent risk of bank runs, Panetta said. Equally, a CBDC would also help facilitate the creation of new payment services, make international payments easier, and lead a diversification of financial services and service providers.

MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
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MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
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