As part of the Bundesbank Invited Speaker Series, Bundesbank President Joachim Nagel discussed the digital euro with economics professor Peter Bofinger. The event was moderated by Falko Fecht, head of the Bundesbank’s Research Centre.

In his opening remarks, Peter Bofinger addressed the question of whether there was a market failure and therefore even a need for the digital euro in the first place. Professor Bofinger also worked through the European Central Bank’s macroeconomic arguments for the digital euro, such as the effectiveness of monetary policy, the decline in cash payments and the lack of a European digital payment option. He also touched upon the possible holding limit of € 3,000 on digital central bank accounts and proposed a single European card system based on SEPA as an alternative to the digital euro. Professor Bofinger also looked at the state of play in efforts to develop a central bank digital currency in other countries such as India, China and Sweden. 

The digital euro as an element of European sovereignty

With Falko Fecht moderating, Professor Bofinger and Bundesbank President Joachim Nagel then debated the need for the digital euro and possible alternatives. Mr Nagel stressed the importance of the digital euro given the current geopolitical situation and the increase in card payments. He regarded the protection of critical infrastructures and European sovereignty as being particularly important. In addition, Mr Nagel highlighted the special protection of citizens in digital payments afforded by the digital euro and the very high data protection requirements. He also emphasised that the public would have freedom of choice, with the digital euro offering another payment option. Mr Nagel expects it to be rolled out in around four to five years. 

As part of the Bundesbank Invited Speaker Series, Bundesbank President Joachim Nagel discusses current issues with researchers and academics. He has already talked with Beatrice Weder di Mauro, President of the Centre for Economic Policy Research (CEPR), on the topic of “too big to fail” and with economics professor Benjamin M. Friedman on the relationship between monetary policy and the battle against inflation.