The European Central Bank (ECB) has further outlined its thinking about a retail or general use Central Bank Digital Currency (CBDC). The bank makes strong arguments in favor of a CBDC. It points to the effectiveness of existing solutions such as SEPA but refers to this as “backend” progress. In contrast, a retail CBDC could provide a “front end” solution for the currently fragmented point-of-sale and online payments infrastructure.
Previous
statements by an ECB representative stated it was difficult to find a strong motivation for a retail CBDC given the efficiency of current systems and high cash penetration.
The latest issues were set out in a
paper for the Economic and Financial Affairs Council (EcoFin), which is part of the EU.
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