ECB’s Mersch on CBDC task force priorities: wholesale is BAU while retail is game-changer

A recent survey among 66 central banks by the Bank for International Settlements shows that more than 80% are working on central bank digital currencies (CBDCs) and the European Central Bank (ECB) is one of them, said Yves Mersch, member of the Executive Board of the European Central Bank and vice-chair of the Supervisory Board of the European Central Bank, at a recent conference, adding that the ECB’s debate on CBDCs is mainly analytical.

“Whether and when it becomes more of a policy debate will largely depend on the preferences of households. We are always willing to innovate in the form of money and payment services that we provide. If, for instance, people voiced a preference tomorrow for plastic or polymer banknotes rather than the traditional paper ones, we would happily accommodate them. In the same vein, we closely follow technological developments and reflect on the type of money and payments that are best suited to the needs of an increasingly digital economy,” he said.

The lack of a concrete “business case” for a CBDC at present should and does not stop the ECB from seriously exploring optimal design so that the central bank will be well prepared should there be a policy decision to issue a digital currency. To this end, it’s set up a task force on a CBDC within the Eurosystem.

On the topic of the design of a wholesale CBDC: if it’s restricted to a limited group of financial counterparties, then it would be largely business as usual. However, a retail CBDC, accessible to all, would be a game-changer. So a retail CBDC is the main focus: “CBDC design choices are not merely technical questions. They have policy and legal implications. This is why we are devoting so much attention to every detail. If and when the time comes, we want to be ready – and we will be ready,” Mersch said in the speech.

Read the full speech

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