Designing an inclusive digital euro

Ludovica Galotto and Maria Iride Vangelisti
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Ludovica Galotto: Economist, Directorate General for Consumer Protection and Financial Education, Bank of Italy, Italy
Maria Iride Vangelisti: Director of the Financial Education Department, Banca d’Italia, Italy

Journal of Payments Strategy & Systems, 2022, vol. 16, issue 2, 137-147

Abstract: This paper discusses how the introduction of a digital euro could motivate those Europeans who are yet to open a transaction account, or who are yet to adopt digital payments, into doing just that. The paper argues that this will require central banks to emphasise the risk-free nature of central bank digital currency. In addition, payment transactions need to be made less expensive and more user-friendly than those offered by private intermediaries. The paper explains the benefits of adopting a digital currency instead of relying on cash alone, such as the ability to send and receive payments remotely, improved security, and greater transparency vis-à-vis historical transactions. After discussing the key design features that a digital euro might adopt, the paper concludes that an account-based digital euro could have a greater impact on financial inclusion than a token-based euro. The more that digital euro accounts are integrated into existing payment systems, the greater the benefits will be.

Keywords: digital euro; central bank digital currency; electronic money; payment innovation; payment instrument; financial inclusion (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jpss00:y:2022:v:16:i:2:p:137-147

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