Like many central bank digital currency (CBDC) designs, the digital euro plans to be distributed via intermediaries. In an opinion piece in the Frankfurter Allgemeine Zeitung, Manual Klein and Dr. Alexander Bechtel argue for greater control over the user interface by banks and payment providers rather than the European Central Bank (ECB). The former colleagues were writing in their personal capacity but work for the Deutsche Bank Group.
While they make persuasive arguments, they skip over the reason this is so critical for banks. Economically, the digital euro looks somewhat questionable for banks. By retaining control over wallet designs, banks get a strong foothold in a digital asset future. Wallets will become their customer’s primary viewport to their wealth. It’s not about the digital euro but about what might sit alongside the digital euro in the future. That includes bank accounts, tokenized securities, funds or a mortgage.
The digital euro’s business model may not prove lucrative to banks. Merchant fees are capped, the banks have to incur technology and customer compliance costs, and the draft digital euro legislation requires them to provide free services. Not to mention that some of their deposits will migrate to the CBDC.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
