An executive from BBVA, a leading Spanish financial services firm, discussed the topic of a digital euro stating that the European Central Bank (ECB) should rely on public-private cooperation, ‘leveraging the strength of all players’ to develop it. During the European Banking Federation seminar, Pablo Urbiola from BBVA’s Digital Regulation team stated that the central bank should follow a cautious and pragmatic approach regarding a digital euro.

He highlighted the need to clear the path to make the functionalities of a digital euro effective for each scenario in the economy. “For instance, if a digital euro aims to respond to the decreasing use of cash, it should be designed as an electronic version of cash – that is, simple, easy to use, with basic functionality. (…) It should be able to replicate (and ideally overcome) some of the more advanced functionalities of these initiatives,” Uribola said.

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Furthermore, the BBVA’s executive pointed out that although it is complicated to state that a digital euro is needed firmly, there are “good reasons” to explore the matter. Still, he believes that the use of cash as a means of payment is far from being eliminated despite the growing decline of its usage due to the COVID-19 pandemic: “Should that happen in the future, a digital euro could, in theory, help to preserve access to and use of central bank money.”

Banks and Customers’ Demands on Digitized Products

“Considering all the innovation that is taking place in the payments market, it is not clear which customer demands a digital euro could fulfill that may not be fulfilled by other initiatives. “(…) The opportunities and risks of a digital euro, and of the different design options,” Urbiola commented on how banks are trying to meet customers’ demand for digitized assets.

In fact, BBVA recently announced that it would launch a Bitcoin (BTC) trading service for its private banking customers based in Switzerland, which will be enabled on June 21.