The risks to commercial banks if Europe launches a digital euro were explored by Fabio Panetta, board member of the European Central Bank (ECB), during a Bruegel online seminar this week.
Panetta outlined three potential types of risks to banks from a central bank digital currency (CBDC).
The first is the potential for bank disintermediation. If more payments are made using a digital euro, potentially banks will participate in fewer payments. Citizens also might prefer to hold funds in a CBDC rather than a bank account, even during stable periods.
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