Digital Euro Can End Bank Crises, Is Better Than Deposits, Ex-Bank of Spain Chief Says
Summary
Former Bank of Spain Governor, Miguel Fernández Ordóñez, spoke at a European Parliament Committee hearing on central bank digital currency (CBDC), advocating for the digital euro. He argued that unlike bank deposits, a digital euro is a safe asset and could eliminate bank crises or lead to the deregulation of banks. There are concerns that CBDCs could destabilize the banking sector by encouraging customers to convert deposits into CBDCs, causing liquidity issues. Therefore, European Union plans for a digital euro include individual holding limits. Ordóñez added that a digital euro could facilitate direct monetary policy by the European Central Bank, improve competition, and support a true European monetary union.
