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Designing an inclusive digital euro

Author

Listed:
  • Galotto, Ludovica

    (Economist, Directorate General for Consumer Protection and Financial Education, Bank of Italy, Italy)

  • Vangelisti, Maria Iride

    (Director of the Financial Education Department, Banca d’Italia, Italy)

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.

Suggested Citation

  • Galotto, Ludovica & Vangelisti, Maria Iride, 2022. "Designing an inclusive digital euro," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 16(2), pages 137-147, March.
    • Handle: RePEc:aza:jpss00:y:2022:v:16:i:2:p:137-147
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    More about this item

    Keywords

    digital euro; central bank digital currency; electronic money; payment innovation; payment instrument; financial inclusion;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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