European Central Bank executive board member Fabio Panetta provided an overview of the central bank’s current research on a retail central bank digital currency (CBDC) when he spoke at the IESE Business School Banking Initiative Conference on Technology and Finance on Friday. Panetta said the issuance of central bank digital currencies is “likely to become a necessity” but warned that “they should not become a source of financial disruption that could impair the transmission of monetary policy in the euro area.”
A key to maintaining financial stability during the introduction of digital currency, Panetta said, would be to give commercial banks a role in the process. This would allow the banks to continue providing front-end services as the central bank benefitted from their experience in customer onboarding and Anti-Money Laundering (AML).
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