A digital euro: a contribution to the discussion on technical design choices

Emanuele Urbinati (), Alessia Belsito (), Daniele Cani (), Angela Caporrini (), Marco Capotosto (), Simone Folino (), Giuseppe Galano (), Giancarlo Goretti (), Gabriele Marcelli (), Pietro Tiberi () and Alessia Vita ()
Additional contact information
Emanuele Urbinati: Bank of Italy
Alessia Belsito: Bank of Italy
Daniele Cani: Bank of Italy
Angela Caporrini: Bank of Italy
Marco Capotosto: Bank of Italy
Simone Folino: Bank of Italy
Giuseppe Galano: Bank of Italy
Giancarlo Goretti: Bank of Italy
Gabriele Marcelli: Bank of Italy
Pietro Tiberi: Bank of Italy
Alessia Vita: Bank of Italy

No 10, Mercati, infrastrutture, sistemi di pagamento (Markets, Infrastructures, Payment Systems) from Bank of Italy, Directorate General for Markets and Payment System

Abstract: In the last decade, the advent of new technologies has dramatically changed the banking and financial ecosystem. Financial operators have transformed their services in the context of the Fintech phenomenon; households’ payment habits are rapidly changing as well, embracing the revolution brought by the digital innovations. In this context, a number of central banks are devoting significant resources to examining the feasibility of introducing a digital currency as a complement to physical money. After an introduction that illustrates the main characteristics defining a Central Bank Digital Currency (CBDC), the paper presents ongoing CBDC-related work around the globe, discusses how a digital currency could support a central bank in performing its functions, and analyses its key features. The paper then illustrates a possible digital euro solution based on the integration of an account-based platform with a DLT-based one. The integration of these two components would make it possible to reap the benefits of two complementary solutions, reciprocally balancing their advantages and disadvantages, as regards, for instance, privacy. Finally, the paper presents the findings of experiments on the digital euro carried out by experts of the euro-area National Central Banks and the ECB; according to the results of those experiments, the integration of an account-based platform with a DLT-based one may provide a sound basis on which to build a fully-fledged solution, capable of meeting both regulatory and retail users’ needs.

Keywords: digital euro; payment systems; financial market infrastructure; blockchain (search for similar items in EconPapers)
JEL-codes: E42 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac, nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wpmisp:mip_010_21

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