Digital, Programmable Euro

Abstract

The financial system has been changing rapidly with the recent advancements in technologies underlying the money and payment systems. With the increase in the involvement of technology in the financial world and the emergence of new technologies like distributed ledger technologies (DLT), there has been a rising trend of creating private cryptocurrencies and stablecoins to replace existing currencies and assets. The increasing influence of big-tech companies in the financial systems and the usage of unregulated cryptocurrencies and stablecoins pose many challenges for financial authorities worldwide, generating the need for government intervention. As a result, numerous central banks worldwide are looking for possibilities to change their monetary systems by including central bank digital currencies (CBDCs) like the digital euro in their offerings. However, it is uncertain how these CBDCs and other digital money initiatives will impact the existing systems and provide solutions to existing problems and benefit the citizens and other stakeholders.