 So we're going to talk about the digital euro and for this I'm happy to welcome Ulrich Binsal, the director general at the ECB, who will speak about the report that the ECB published on this. So we will see Ulrich is with us. Yes, thank you very much Elin and thanks to the panelists also from my side and to Fiona. It was great to listen to the discussion and I try now to share my screen, right? I don't think I'm enabled, I try but I'm trying, I'm trying one second. You are being made the presenter now, so you should be able to now. Okay, yes. So you can see the presentation? Yes. I can maybe, is it better now? Is it big? No. Okay, I have to share the other screen one second. Sorry, give me one. Let me maybe continue like this. I have three screens. Okay, maybe let me start if it's big enough to see. Okay, so digital euro and transfer of payments, the panel already started really discussing this. So we have new kids in town. We heard about of course big techs entering the market. We have EPI as a very important initiative and then we may have a digital euro maybe sometimes in the future. So as you know, we published a report just I think on 2nd of October. The ECB published its digital euro report which explains its thinking really and of course my presentation will be based on this report and I mean let me not go now through the presentation overview. Let me start directly again with what do we mean by a digital euro. It's a central bank liability or call it central bank money available in digital form for use in retail payments which is of course for citizens but also for non-financial companies. Again one more time it would complement and not substitute cash. I think the ECB is saying that at every occasion so Monique's plea I think is fully taken up. Of course some people may see I think gets close to conspiracy theories saying that the digital euro is at the end a mean to discontinue bank loss but that's really not the case. I think the communication is very clear on that. Secondly there is the idea to maximize synergies with the industry not to reinvent the wheel not to reinvent many things that the industry has successfully deployed over the last decades and which the central bank should for efficiency reasons not replicate and then yeah the digital euro has not been necessary so far. There are scenarios under which it will become useful and maybe necessary and that is explained in the report what those main scenarios in the view of the ECB would be where this assessment would change and again as previous speakers here have been saying and Fabio Panetta has been saying and our president has been saying the ECB the euro system needs to be prepared because the scenarios under which then an issuance of digital euro makes sense can materialize maybe even faster than we now believe. So yeah what are the main benefits of a digital euro in short the long version is of course in the report. So first the digitalization of the European economy I think that has also been mentioned several times in the panel. The EU digital single market agenda is very consistent with that idea now that we have a digital euro serving the economy so maybe this point goes even beyond citizens and consumers it would be a tool also for the economy and their terms like the programmable money or programmable CBDC are mentioned in industry circles as also you know being supported potentially by a digital euro. Then there's clearly the scenario of a declining use of cash as a means of payment again you know regardless of the central bank's commitment to issue digital sorry non-digital cash so bank without time limitation still you know usability of cash can go down and Sweden has been one example for that so if we extrapolate this development to the euro area then let's say the usability of central bank money would decline even if we would issue a cash even if the stock of cash would continue to be significant it wouldn't you know guarantee that that it can be used moreover you know just from the growing share of e-commerce and things where already now you cannot use cash obviously you may want to preserve let's say the ability of citizens to rely on central bank money as a further option in addition to commercial bank money and last but not least and that has been also mentioned many times in the panel and in the speeches tackling sovereignty concerns relating I mean he had mentioned foreign CBDC which is maybe also a futuristic let's say concern but more concretely as the panel members also insisted on that there are already now let's say there's a dominant market share and market concentration of non-european retail payment providers in an area let's say of high strategic importance of high importance for citizens for the economy so their digital euro would be another let's say pillar of sovereignty in addition of course to a european private sector solutions that we talked about in the in the panel so we the euro system needs to be prepared to be ready to deploy those benefits in particular under certain scenarios and the euro system vcb is not unique of course in this so it's a global let's say phenomenon of central banks to study cvdc so a bis report found that 80 percent of central banks globally are engaging in cvdc work and here just to mention you know big the big players the people's bank of china has been one of the early movers here and started to study cvdc in 2014 it started a life experimentation and a local and focused deployment of cvdc in the 2020 and here what ravier santa maria has been saying rom has not been built in one day seems to apply also for cvdc looking at the time the people's bank of china has also taken to work on this and the federal reserve system has also let's say joined joined the club recently we have joined the club and another let's say interesting maybe publication is one by the bis of a group of seven central banks i think that was published also on the 9th of october so it gives you some let's say common views of seven central banks including the fed the bank of japan and the ecb on cvdc including on international questions so here that is just to put again the you know the nature of cvdc next to you know the one alternative and one thing that is not an alternative so cvdc is a liability of the central bank it is you know that is a differentiation to a private means of payments which are a liability of a private entity and of course you had already now central bank money as you know cash in the form of bank notes was accessible to the general public and there was also a digital form of central bank money which were deposits with the central bank with the euro system but that access to this type of deposits was limited essentially to bank snow so in a certain way cvdc combines the two in the sense we have a general public access but we have a digital the digital form so private entity liabilities commercial bank money is well known is available in digital form is deployed in in many variants of course you have e-money you have you know payments with cards you have then maybe as an intermediate I think moving further away from commercial bank money is a stable coin projects that entail a liability of an identifiable entity and that is no longer the case if you move them to the right so bitcoin pure crypto assets is not a liability of anyone it is just an asset it is not linked in terms of value to any monetary unit that therefore fluctuates and is not let's say has only to a very limited extent the properties of money and is something therefore completely different so what has to be done towards you know being able to issue central bank digital currency a digital euro so maybe in this in this chart I would suggest to start with the lower middle panel so we have no sorry with the end user perspective and the legal issues no that's really the starting point of course everything has to take place within a legal framework and and with or without let's say further legislation to be confirmed and then we have the end user perspective which of course has to drive everything a cbdc should have you know maximize the usefulness for the user there has to be a value proposition for users so the end user perspective has to be really studied and understood then we can move to design decisions and the design decisions then you know first of all the functional design decisions and then on that basis we can move up to then the technical design no and the technical design if you want has three elements a back end infrastructure and a front end infrastructure and then you know various let's say issues relating to the distribution framework really the front end that will be the access point of consumers or firms there will be the question how digital euro and commercial bank money will be exchanged against each other so all those things then need to be studied in detail and yeah they are quite multi multi-dimensional and and non-trivial so very careful analysis is needed here and the question again how will this new kid in town really or how would it interact with the private initiatives and the cbdc really feels the digital euro is a compliment and not a competitor primarily to private initiatives so so why is that so first of all you know the payment the digital payment market is a is a gigantic market and it is a growing market and if we assume you know the scenario that digital payments will take another increasing share in total payments then you know there's ample space for coexisting in the same sense as there there's coexistence now at the point of sale between cash payment and digital payment yeah so let's say the digital euro would come into play also when anyway there would be more migration from cash payment to digital payments so in so far crowding out of private players is not a necessity at all in this growing market in which the usage of banknotes is shrinking and then I think there's no doubt the private sector will remain more innovative and and therefore should you know always be ahead maybe in terms of its solutions to the more let's say conservative or a central bank solutions and maybe the focus of the central bank solution on on really core services not you know private providing the whole set of value added services that the private sector is looking for I think the central banks and dcb in its report has been clear that there's no ambition to take over the front end so there's the idea that you know synergies with the private sectors should be maximized in terms of the front end solution and then also there's you know this question of will there be a shift of a balance sheet from commercial banks to central banks when let's say massive amounts of deposits which are now with commercial banks would become you know would be shifted by holders of those deposits to to become a digital euro and there again the central bank has no interest no ambition to see that happening because you know banks play an important role in the transmission of monetary policy they are the ones who are able to do or to or they are the experts in credit provisions the central bank has no ambition to substitute that so the balance sheet of banks should certainly be preserved and the functional design of cbdc has to include this you know possible tools to avoid that cbdc becomes such a success that it would crowd out in any way central bank balance sheets and yeah the idea is that cbdc if relying on on the private sector in its distribution in its front end could preferably be offered through supervised service providers obviously you know it's a it's a tricky and responsible activity and yeah it would be natural you know that this is left to the supervised parts of the industry one maybe a crucial um design question is the one account based versus bearer based or token based um digital euro so the idea is very simple account based mean there's somewhere you know a central ledger which captures uh who holds what basically and any transaction is recorded in the central ledger where the bearer design would be you know much closer to the idea of a physical bank note that is exchanged directly between two holders and there's no central ledger recording of this of course the the account based is what you know is really tested and used in the payments industry at all layers from the central bank to the end user in various you know variants and layers um and for electronic payments it's more obvious it relies on online payments to link everything of course to the central ledger where the bearer is more innovative more tricky and also in terms of security of course um creates additional challenges but here really the um the analysis is open-minded to both so in the next phases of our investigation we will continue to look at at both options whereby um in my intuition at least the account based approach will in any case play an important role while the token based the bearer based can play a role in certain situations where you really want to have offline ability it's time to vote so um maybe Elin can explain what the question is on the table yeah so on your right hand side you will now be seeing the poll question the question is which approach to settle the digital euro payments do you find most appealing a account based b bearer c a combination of both so if you click your votes you have 30 seconds to do so yeah please please vote maybe vote even more than during the panel yeah so we have 20 seconds left and then we will show the results on the side yeah when the time is up the results appear so let's see it's like uh the winner of the oscar everyone is excited now we need to see do you see uh the results Elin like oh they're there here they are okay so yeah quite a heavy participation very good so there is a majority for the combination of the two sorry that I spoiled with my view also maybe the question but um I think that's that's pretty plausible then there's a account based um is ranked second and bearer based is the third ranked amongst participants I think um let's say tech um or let's say people who who view cbdc very much also in the context of a dlt of let's say fundamental innovation of of ledger systems they tend to sympathize of course also with a design which goes into the direction of a pure token um and also people who like um you know who who emphasize the advantages of decentralized purely decentralized framework in terms of privacy tend to sympathize I think with bearer elements okay thank you I can then move on in my presentation so here is just a list of uh maybe more concrete um features how um maybe I will close it so how would the digital euro look like concretely that's a good question though so for so far I mean where it has to be worked out but the intuition is that it will look like any other modern payment solution for point of sale and online payments so if it can be embedded into existing private solutions that would not be bad of course and then there's nothing speaking against you know having a very similar appearance of what consumers know from the electronic payments they are currently doing of course it should be available throughout the entire euro area it's so I shouldn't serve the needs of all segments of the population in a non-discriminatory way and curtail financial exclusion for the unbanked and for vulnerable groups so the usability should have really in mind the entire population and efforts should be undertaken to achieve this inclusion of course inclusiveness is not free it's costly to achieve it but that that investment should be done it should be the digital euro should be mindful of privacy and that of course is not limited you know to a bearer based CBDC but also an account-based one can you know ensure privacy to a very large extent and that of course is different from the business models also of some private providers in payment services who have realized the value of payment information in understanding individual consumers demands so that is something that would be excluded for the digital euro by definition it would be risk-free central bank money and it should be free of charge and for basic uses by payers again similar to existing forms of central bank money usable for citizens namely bank notes yes already again time to vote so eline what is the next question yes so the next question is on the screen so this is a multiple question also multiple answers are possible so you can click more than once the question is what is the most important feature that a digital euro should offer a pan European reach b privacy c use with smartphone at the payment terminals d use offline e additional no additional cost f use with the dedicated physical device so here you can you can press more than one you can press as many as as you want yes you can okay okay so if i would be if i would be you i would press everything but that is boring so don't press everything don't press everything so as soon as the time is up we will show the results 20 seconds left so everybody is clicking yeah yeah so you can't think too much anymore there is 10 seconds left okay here we go let's see what the system here we are okay it's uh yeah we have a winner yeah it's uh yeah almost ranked but the winner is a pan european reach okay the the audience is european oriented that's very good and we have next is the use with smartphones yeah we are all smartphone addicts and we want to pay with smartphone and obviously biometrics is i would say the you know the big difference that smartphones also offer now in the payment convenience so that's not surprising then the privacy is ranked very high use offline as well yeah so sorry no be precise next one is no additional costs then comes use offline i think we are almost you know all of us are always online those days but we still dream of being offline sometimes so that's why it would be nice to have a cbdc which works offline for 133 respondents and then yeah the use with the dedicated physical device is not so popular yeah a dedicated physical device maybe we don't want to to have one no we want to maybe use our smartphones and not be bothered with with something in a in addition that's um so that's a negative vote maybe against a dedicated device which you know i think comes into play potentially for offline payments though but okay maybe offline is possible without a dedicated device okay thank you then i'm coming i think soon to the end so further assessment is is needed again it's a it's a project as as big as building Rome almost so hopefully not so now we have you know the milestone the report was published and they are now let's say two in particular two work streams awaiting us which is a public consultation and and further experimentation and i think also that's maybe needless to say conceptual work and and some you know conceptual work issues are listed here yeah um so implications of cbdc for key areas of interest of course for the central bank and and for others uh is uh you know the impact on monetary policy the impact on on the economy therefore and on financial stability and the financial system the banking system so that is uh is a topic often mentioned and you know the the objective is clear of course cbdc must not you know put in question financial stability it should not of course crowd out the private sector in any way so they're clear you know already objectives formulated in the report but to be worked out exactly how those objectives are fulfilled through a functional design of cbdc then yeah the question of privacy of remuneration needs to be worked out and the already mentioned uh technological aspects like for example decentralized um working versus the central ledger the offline usage but many many other questions so then the public consultation yeah um the public consultation has been launched i think was it on 12 uh 12th of october and it will run for three three months so i think it will end um on the is it 11th of january or 12th of january midnight yeah it will end and it includes it's on our website everything is explained there at the end the answers have to be given online you have to register and it it should really address both citizens and and professionals so everybody can answer all questions of course but some of the questions are probably more for more taking the citizens perspective and others are taking the the service provider the financial industry perspective so um yeah i think we we are very keen of course to get input to really understand the requirements i mean from citizens what are the user requirements from from citizens what is the design and from professionals of course ideas on um on technical solutions ideas on the integration into existing payment solutions yeah we are we are very keen to get any idea here uh what what will lead to to really efficient and user friendly um solutions and uh yeah then we have experimentation so if uh you know this is experimentation with maybe a six months horizon so it is not you know experimentation probably with a large-scale deployment of cbdc to let's say citizens for certain uses as it is currently taking place in in china we are not yet there but there's a lot to experiment to check you know for scalability of solutions for the possibility of offline you know there there are various things we also you know can check what our current uh infrastructures that we have can possibly contribute as you know we have tips as a instant payment system so instant i mean cbdc is by definition you know needs to be instant so the question is uh is uh is tips you know can that be an inspiration for a backend solution for um cbdc so you know various experiments of a let's say smaller or medium scale can be done to really um move on you know in terms of understanding the technical options while doing in parallel more conceptual work and collecting the citizens and the professionals input through the public consultation so that's um that's what is currently then um on the um let's say agenda for the first half of next year and then in mid 2021 the euro system could you know consider whether to launch a digital euro project so to really move you know one step further and again it would be launched to be prepared so launching a digital euro project and let's say investing the resources to really become able to issue a digital euro should not be you know mixed with a decision to really issue the digital euro yeah so that decision is not to be taken in mid-21 but the decision to launch a project which you know would allow us or would allow the decision makers to um one day decide to issue the digital euro okay thank you thank you very much and i understand elin we may have questions i don't see them i see them okay excellent so there are a number of questions i um of course i see the time but maybe uleg you have a few minutes just to answer a few of them um so there is one here um that says is instant payment in central bank money in essence not already a transaction in central bank liability the question is of course are they speaking about instant payments as instant payments and tips or instant payments as in rggs yeah so um let's let's take instant payment in tips yeah i mean here from the perspective of the um the uh the citizen the consumer that is still you know a payment in commercial bank money the the settlement is um then instantaneous in central bank money but in terms of the claim of the bank um to um to let's say the central bank money pool in uh in target two so it is uh set it in central bank money but not at the the holder the the payer and the payee don't pay in central bank money they pay really with um commercial bank money so if one would want to use tips as uh the basis if you want the central ledger of uh digital euro then um basically the citizens the users would have to get their own tips accounted in one way or the other so that would be something different thank you uleg and there's another one here what is the role of commercial banks for a digital euro so is there a role for commercial banks if yeah yeah the role i mean that uh that um that what that's you know implied by the idea to rely on on the private sector in in particular providing the front end and of course i mean who who has currently um most european citizens as clients those are the banks so um you know customer identification um and for you know AMA CTF purposes um that's all you know what banks are doing and um i think on boarding citizens to CBDC would would be much more feasible and efficient if it would rely basically on the bank um the bank relations with uh with their customers of course it does not need to be the only way to make CBDC accessible but in terms of ease and scale that seems to be an obvious choice and of course if the european banks um you know launch epi deploy epi of course you have then the economies of scale and efficiency from again a single payment solution that could you know have then even more synergies with CBDC that would be a kind of uh yeah maybe most efficient scenario but again CBDC should probably not be exclusively linked you know to one distribution channel but of course the the bigger the more efficient um those distribution uh channels are that can you know team up with CBDC the better certainly excellent thank you very much so maybe just one more um one more question we have a lot here in here but let's just take a last one could the discussion on CBDC digital euro create uncertainty that might discourage the industry from working on pan european payment solution yeah that that uh the answer should be no and we should do everything uh that everybody agrees that the answer is no because as as mentioned you know we are talking about um a further growing market a gigantic market no retail payments electronic retail payments is growing and is also growing because payment in central bank money in the form of bank notes gets gradually substituted by a digital payments no therefore you know the central bank entering this market does not imply the necessity for crowding out private players and um i mean that's that's a general remark and second there's the idea of teaming up on the front end solution and third there's no ambition to substitute balance sheet so all those things are very clear in the mind of the central bank and we must of course convince the private industry that therefore their investments into private retail payment solutions are fully deserved yeah okay and then this would be it no no further questions no i think otherwise we can be here until tonight so thank you very much it was very interesting to hear all the insights on the possible digital euro and just to remind everyone on the date as we mentioned it is the 12th of january 2021 um so before we close i want to hand over uh to jona who has agreed to do the closing mark of today so maybe Fiona you are there yeah thank you okay thank you very much Aline and uh thank you also to Ulrich for that interesting presentation on the digital euro so uh indeed as the conference comes to a close i would just like to briefly recap on some of the highlights that we heard um we started of course uh by looking at the challenges and also the opportunities of the digitalization of the european retail payments market and uh we have done so under the new normal that the COVID-19 pandemic has introduced uh a situation where jonas at which all in our race and may change one and digital in a matter of just a few months now i don't want to suggest that we expect the european retail payments market to change towards being 100% digital so quickly but still it gives a sense of perspective in in all of this um mr fabio penetta ecb executive board members started this morning by outlining the comprehensive response of the ecb to the changing payments landscape a response which consisted of four elements first our cash 2030 strategy which is to ensure that bank bank notes remain widely available and also accepted as a competitive reliable payment instrument and as a store of value our retail payment strategy which is aimed at fostering pan european payment solutions an innovative european ecosystem for payments as well as full deployment of instant payments and then he also covered the ecb's approach to act both as a catalyst and to foster and support change in the market as well as our role as an operator of pan european solutions such as a target instant payment settlement service tips our new oversight framework was the third aspect that he covered yeah this is a framework covering electronic payment instruments schemes and arrangements the new framework will be called um pisa and this will be released for public consultation in the coming weeks and fourth possible launch of a digital euro that would both shape and promote the digitalization of payments in turn supporting the digitalization and modernization of the european economy and then following on from uh fabio uh speech we had commissioner morade mcginnis who spoke about the commission's retail payment strategy for the eu and uh the different objectives that this wants to achieve first being the broad and diverse range of payments secondly an objective for instant payments to help reduce our dependence on the well-established players such as international card schemes and also more increasingly also on technology companies and third and finally the fact that the commission is committed to enhancing cross-border payments with non-eu jurisdictions in order to make them faster cheaper and indeed also more uh convenient and uh i would like to thank in particular um miss mcginnis for agreeing to speak at our conference because as was mentioned earlier she started in this role only last week on the 12th of october as the new commissioner for financial services financial stability and capital markets union um the two keynote speeches they show the alignment and cohesion at european level and highlight the importance of the efficiency of the european payments market and the sovereignty of the euro uh we then had the panel discussion where stakeholders from the industry and the central banking side discussed concrete actions taken to achieve the basis for pan european payments solutions and what is still needed for these solutions to be deployed and rolled out across europe and we also heard the consumer perspective and what is important for the consumer in all of this during the panel it became clear that there's a lot to be done and that this needs to be done quickly and we have no time for complacency in any respect but overall the elements are there for a pan european or more pan european payment solutions and there's a very definite momentum behind this to go forward and also of course to bring consumers and their needs with us throughout afterwards we had the presentation on a digital euro and how it could impact the retail payments market but from Ulrich Winsall the digital euro would be a new payment means but it would not substitute front end solutions to end users therefore understanding and collaboration would need to be up front and central which is why the ECB has launched public consultation on the digital euro report which will run until the 12th of january next year as Ulrich also mentioned so this is just a quick overview of the the different aspects that were covered in the conference this morning i'd like to thank all our panelists and presenters and speakers for guiding us through today all of the participants in the audience who were very active with their questions unfortunately as Aline said we didn't have time for all of them but we will definitely be following up and we look forward to having such sessions again thank you very much thank you Fiona this is the end of the conference today so i just want to remind all of you that the recordings of today will be uploaded on the ECB website after the event so in case you are not able to watch the whole session you'll be able to view it here we also provide you with how you can follow us and stay tuned on new events or other news from the ECB thank you for my side as well thank you everyone