(Refiles to remove extraneous word ‘have’ from final paragraph)
MADRID (Reuters) -The European Central Bank needs to measure the impact of the digital euro on the euro zone’s banking system before any final decision on its potential launch, Spain’s deputy central bank governor Margarita Delgado said on Friday.
The ECB is due to decide in October whether to push ahead with a digital euro, which aims to tackle a shortage of European payment service providers.
In June, the European Union proposed injecting more competition into the payments sector, giving legal backing to a digital euro, meaning it would have to be accepted as a form of payment.
“The issuance of a digital euro should not be in detriment to the stability of the financial system,” Delgado said, adding that despite the robustness of the euro zone’s banking sector, “we cannot ignore the elements that might impact the competitiveness and profitability of the banks.”
Delgado, who also sits on the ECB’s supervisory board and is among the main contenders to become its new supervisory chief, said it was important to gauge the overall impact of a digital euro on banks’ liquidity as a result of the transfer of money from banking accounts to digital euro wallets.
A digital euro would provide a payment solution based on European infrastructure and accepted throughout the entire euro area, she said.
Different tools might be implemented to avoid unintended consequences for financial stability, such as setting a limit of around 3,000 euros ($3,200) on the amount of digital euros that users may hold, Delgado said, according to a speech published on the Bank of Spain website.
Electronic payments in the EU grew from 184.2 trillion euros ($201.7 trillion) in 2017 to 240 trillion euros in 2021, accelerated by the COVID-19 pandemic.
($1 = 0.9280 euros)
(Reporting by JesĂşs Aguado; editing by Andrei Khalip and Mark Heinrich)
Credit: The Star : Tech Feed
