I have long been an enthusiast for central bank digital currencies (CBDCs). Last October I stuck my neck out to predict the eurozone would introduce one by the end of 2025, on the back of an interview with Fabio Panetta, the executive board member who heads the European Central Bank’s work on a digital euro. I may still be proven wrong on that particular call, but there is no doubting that the central banking community, in general, is accelerating down the path towards official electronic cash.
This week there is a palpable pick-up in the pace. You can feel it in a new Financial Times interview of Panetta by my colleague Martin Arnold. While the ECB has formally still not decided whether to launch an e-euro, focus is shifting from outlining how one would work to emphasising the benefits it would bring. Panetta emphasises how CBDC can be more respectful of data privacy than a private digital means of payments.
This shift from analysis to recommendation is particularly striking in a new report from the Bank for International Settlements. The “central bankers’ bank” boldly stated that a CBDC was “a concept whose time has come”.