Banks Demand Comprehensive Digital EU CBDC Risk Assessment - IIF
(20 June 2022 – Europe) The Institute of International Finance (IIF) is pushing for the European Commission (EC) to evaluate the impact of issuing a digital euro as leading Banks urge caution towards the European Union’s (EU) Central Bank Digital Currency (CBDC) plans.
The IIF asserts that there appears to be an assumption that a CBDC is a good idea despite the European Central Bank (ECB) yet reaching a definitive decision. The EU should carefully consider the impact from issuing a digital euro and this assumption itself needs to be verified according to the IIF.
The IIF’s 450 members are heavily weighted towards commercial and investment bank interests including JPMorgan and Goldman Sachs but also include accounting and consultancy groups (KPMG), payment networks (Visa), the International Monetary Fund (IMF) and crypto exchange Coinbase.
The IIF highlights that a digital euro could be programmable, allowing it to be automatically transferred as part of smart contracts, and could make it easier to effect cross-border payments which is currently a cumbersome, expensive and time consuming process.
“The IIF wants to see a clear qualitative and quantitative impact assessment of the range of possible designs of a digital euro, looking at the various risks to financial stability” commented IIF Managing Director for Digital Finance, Jessica Renier.
“Doing away with the banks’ role would be extremely detrimental to financial stability and the economy. That is good for no one, you can't exist without the banking system. I would say a retail CBC certainly poses some potential challenges and risks. They're not insurmountable challenges. But it's important that we work through some of those challenges and risks ahead of time. The IIF supports the European Commission's efforts to collect answers on these questions" of design” Renier added.
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