The world is becoming increasingly digital – this presents a whole host of challenges for payments in Europe, but also opens up opportunities as a result of innovations. Around 250 experts from the business community, academia and state institutions met to discuss these developments at the Bundesbank’s Payments Symposium 2024, including Bundesbank Executive Board member Burkhard Balz and Piero Cipollone, member of the Executive Board of the European Central Bank. Isabelle Körner moderated the event. 

Geopolitical developments playing an ever greater role

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Bundesbank Executive Board member Burkhard Balz addressed a number of challenges in his speech. Mr Balz, whose remit includes payments and settlement systems, said that the emergence of new forms of money and the advent of new technologies, the entry of new competitors into the market and a heightening of cyber risks are just some of the developments that warrant an active response on our part. Furthermore, according to Mr Balz, geopolitical developments are playing an ever greater role in the payments space and the regulatory framework is undergoing a major evolution.

He also touched on the topic of digital central bank money for the financial industry. Not only do we have to make sure that what we are offering right now is secure and innovative. We also need to be putting in the work today to make sure that large-value payments – such as for settling the cash leg of securities transactions – can be settled tomorrow in secure central bank money, too, noted Mr Balz. This is why the Eurosystem is exploring the topic of wholesale CBDC. Mr Balz also spoke about his views on the digital euro (see below for a link to the speech). 

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Piero Cipollone, member of the Executive Board of the European Central Bank, held a keynote speech on the path to a digital capital markets union. He explained that recent progress in digital technology presents an opportunity in Europe to create an integrated capital market for digital assets. Central bank money has a key role to play when it comes to interoperability and integration. 

Speeches and discussion panels revolving around payments

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Further speeches and discussions focused on the European Payments Initiative (or EPI for short), the impact of the G20 roadmap on cross-border payments, the digital euro, the regulation on instant payments, and wholesale CBDC. 

 

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Julian Reischle, Director General Payments and Settlement Systems at the Bundesbank, interviewed Martina Weimert, CEO of the European Payments Initiative since 2020, on the topic of “EPI – a European strategic response to global challenges”. The interview mainly centred on how the mobile payment function, Wero, operated by the EPI can enrich and move things forward in the European payments space. How the EPI and a digital euro could complement each other was also discussed. In the panel on wholesale CBDC, participants talked about how far Europe is lagging behind Asian countries in this area. Wholesale CBDC refers to the settlement of wholesale transactions between commercial banks in central bank money. The Eurosystem’s exploratory work and the success of the Bundesbank’s trigger solution were highlighted in particular. A panel discussion on instant payments saw the participants discuss amongst other topics, the question of what can be done to better promote instant payment solutions for corporate and retail customers. They also addressed the risks posed by fraud and how this can be prevented. 

Never think in purely national terms

Julian Reischle brought the event to a close, saying that the day’s sessions had made it clear that the payments space and payment systems are facing sweeping changes. These changes are influenced more heavily by geopolitical developments than ever before and are particularly relevant for society. Such developments are especially significant for the payments space, as payments can never be thought about in solely national or regional terms. Against this backdrop, Mr Reischle also referred to the presentation given by Carlo Masala, Professor for International Politics at the University of the Bundeswehr Munich, who painted a striking picture of the diverse and multi-faceted geopolitical challenges in his lecture “The new world order – what can Germany expect?”.