National Bank of Belgium: A Digital Euro for the Digital Era

“We are at the beginning of a journey that could change what our currency looks like”

— Governor Pierre Wunsch

Introductory Remarks

The possible introduction of a digital euro, in the form of a central bank retail digital currency or CBDC, would be a major project for the euro area and the Eurosystem. It would significantly change the form in which central bank money is made available to the general public and therefore represent an evolution at least as significant as the introduction of euro banknotes more than 20 years ago.

Before formally launching the conference “A Digital Euro for the Digital Era” co-hosted by the National Bank of Belgium (NBB) and the Oesterreichische Nationalbank (OeNB) in Brussels on 7 September, Mr Pierre Wunsch, Governor of the NBB, and Mr Robert Holzmann, Governor of the OeNB, reflected on the path that has led the Eurosystem to this point. There were three main drivers: (i) the announcement by a BigTech a few years ago that it would launch its own stablecoin, called Libra; (ii) the geopolitical context in which we live, which is tending towards greater European autonomy and resilience in key areas, including payments; and (iii) the international role of the euro, which we should safeguard. As central banks around the world are exploring retail CBDCs, it is only natural that the Eurosystem should do the same.

The journey therefore began in October 2021, when the Eurosystem launched an investigation into what a digital euro could and should look like. Since then, four progress reports have been published, each setting out the Eurosystem's thinking on the matter. In parallel, the finance ministers of the euro area Member States have discussed this issue in depth on numerous occasions in the Eurogroup. Additionally, both Governors underlined the importance of the European co-legislators, namely the Commission, the Council and the Parliament, who have recently started to develop a legal framework for the digital euro. Indeed, this legal framework is essential to enable the Eurosystem to potentially issue a digital euro.

However, it is important to stress that the above-mentioned actors should not be the sole drivers of this initiative. Our common currency and its form, be it physical or digital, affect the lives of all citizens beyond central bankers and European policymakers. Therefore, active listening to all stakeholders is essential to ensure that all viewpoints are taken into account when considering the future design of a digital euro. Indeed, the insights of speakers representing the payments industry, including banks and acquirers, as well as consumers and society at large, are of paramount importance, and the line-up of speakers at this conference ensured that participants would hear the views of these diverse stakeholders.

Before diving into the panel discussion, the event set the stage with presentations from two central bankers. This approach facilitated a constructive debate by providing the audience with factual and basic information, thereby creating a level playing field and avoiding the spread of misinformation that would fuel conspiracy theories. Mrs Evelien Witlox, Digital Euro Programme Manager at the European Central Bank (ECB), and Mrs Petia Niederländer, Director of Payments, Risk Management and Financial Literacy at the OeNB and member of the ECB's High-Level Task Force on CBDC, reviewed the rationale behind the project, the building blocks that underpin it, and the challenges and key success factors associated with its implementation.

Unpacking the “Why” and “What” — Keynotes from Mrs Witlox and Mrs Niederländer

In her keynote speech, Mrs Witlox reiterated the motivations behind the introduction of a digital euro within the Eurosystem, echoing the points made earlier by Governors Holzmann and Wunsch, namely to ensure ...

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