Central bank digital currency (CBDC) projects are gaining momentum worldwide. This discussion paper examines the European Commission’s proposed digital euro project to assess its impact on consumers, the commercial sector, financial institutions, and monetary policymakers.
The first part of the paper analyses the context that led to the development of the CBDC.
The second part then examines whether the advantages of the digital euro actually justify and outweigh its risks.
The third part assesses the financial stability and monetary risks that this change may pose for the modern banking system and commercial relations with consumers.
The paper concludes by analysing how the digital euro may affect price stability, which is a primary task of the European Central Bank.
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