On the 5th of November 2021, Fabio Panetta, Member of the Executive Board of the European Central Bank (ECB), gave a speech at the Elcano Royal Institute in Madrid on Central bank digital currencies as a monetary anchor for digital innovation. The most important points highlighted by Fabio Panetta can be summarised as follows:

– Central Bank money is the only money whose face value is intrinsically guaranteed and private issuers have to rely on convertibility, as their money is exposed to operational, credit, liquidity and market risks which are reduced through public policy safeguards (financial supervision, capital requirements and deposit insurance);
– Half of euro area consumers would prefer to pay with cashless means of payments, such as cards. This is confirmed by the following features:
1. Internet sales in the euro area have doubled since 2015;
2. Cash is increasingly used as a store of value and decreasingly as a means of payment, a trend that the pandemic has accelerated;
3. Only about 20% of the cash stock is now used for payment transactions, down from 35% fifteen years ago; – Having a digital euro would enable citizens to continue using central bank money as a means of exchange in the digital era. A digital euro and cash would complement each other and ensure that central bank money remains a monetary anchor for the payments ecosystem and continues to serve as a means of exchange, a store of value and a unit of account;
– A complementarity between digital euro and cash would ensure that central bank money remains a monetary anchor for the payments’ ecosystem while, at the same time, serving as a means of exchange, a store of value and a unit of account.

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