EESC: What happens to the electricity market design?

Central banks around the world are currently discussing and deciding on whether to introduce a central bank digital currency (CBDC). Some 90% of central banks, accounting for 95% of global GDP, are currently in the process of considering the adoption of a digital currency.

More than 110 countries around the world are exploring the possibility of introducing a digital currency. Around half of the world’s central banks are developing or carrying out specific trials in relation to the introduction of CBDCs. Moreover, two thirds of central banks intend to introduce a CBDC for retail transactions in the short or medium term.

There is general agreement that lower costs and more efficient, faster and more secure payment transactions can be expected following the introduction of digital currencies by central banks.

This process of central banks adopting digital currencies is linked to the dynamic developments in the cryptocurrency market. Furthermore, the emergence and rapid spread of COVID-19 has further accelerated this digitalisation process.

When making decisions on introducing central bank digital currencies, it will be important to take into account the impact of such a move on macro-financial stability. States that have decided to adopt and potentially implement digital currencies are expected to see significant benefits, not only in terms of speed, efficiency, and volume of operations, but also in respect of the uninterrupted functioning of the payment and settlement system.

Like other central banks worldwide, the European Central Bank (ECB-Eurosystem) adopted a decision in July 2021 to launch an “investigation phase” ahead of the possible introduction of a digital euro. The EESC is pleased that the ECB is continuing to work towards its introduction. However, a decision on whether to adopt a digital euro has not yet been taken.

The digital euro will constitute a new form of money. In this regard, all of the positive aspects and opportunities offered must be taken into account when considering its adoption, all of the potential risks must also be pointed out. A digital euro should be mainly used as a means of payment and not become an instrument for financial investments, in order to avoid negative consequences for the financial sector.

Marie Zvolská,