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Why a digital euro isn’t a forgone conclusion, despite its advantages

Pegging a digital currency to a lender of last resort will be appealing, but uncertainties remain

By

Katharine Neiss

A digital euro would allow everyone — including households and businesses — to directly make electronic payments in money issued by the ECB
A digital euro would allow everyone — including households and businesses — to directly make electronic payments in money issued by the ECB Photo: Getty Images

Katharine Neiss is chief European economist at PGIM Fixed Income and a former Bank of England official

When Facebook announced its plan to launch Libra in 2019, the news caused a collective outcry from global central banks and finance ministers. Officials were concerned stablecoins would pose a threat to financial stability and weaken the transmission of monetary policy, ultimately undermining the sovereignty of nation states.

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