Deputy Governor of the Bank of Spain, Margarita Delgado, recently addressed the introduction of the digital euro and its implications for private payment services during her speech in Pamplona on Aug. 25. Focused on the European Commission's proposed digital euro legislative plan, Delgado discussed the integration of private payment solutions with the digital euro's infrastructure.
One of the key advantages highlighted was the potential of the digital euro to tackle challenges faced by the European Union, such as cross-border payment barriers and the limitations of private payment service providers (PSPs) within Europe. The rise of central bank digital currencies and stablecoins globally could exacerbate the scarcity of PSPs unless the digital euro is implemented. Delgado emphasized this point, stating, "We believe there is enough space for a digital euro and private payment solutions to co-exist. Our expectation is that the digital euro will stimulate the growth of pan-European payment and financial services offered by the private sector, enabling it to compete effectively on a global scale."
To ensure the successful launch of the digital euro, financial security remains a paramount concern. Delgado underlined the necessity of establishing a common supervisory and resolution authority under the European deposit insurance scheme before extending common deposit insurance coverage to the digital euro.
The European Central Bank (ECB) envisions a staged rollout of the digital euro within the eurozone before considering expansion. Delgado pointed out that beyond the eurozone, the retail adoption of the digital euro will open doors for private PSPs to operate as intermediaries, providing additional opportunities for growth.
The ECB is actively advocating for regulatory measures concerning PSPs. Delgado articulated the ECB Eurosystem's call for regulators to mandate PSPs to offer the digital euro to the wider population. Furthermore, the ECB intends to require PSPs to issue physical payment cards for the digital euro.
The proposed regulation seeks to create a level playing field for digital euro access. Under these regulations, PSPs would be prohibited from levying fees for basic services or imposing contractual agreements before granting access to the digital euro. Additionally, PSPs would be obligated to offer assistance during onboarding and transactions for vulnerable groups, ensuring accessibility and ease of use.
In conclusion, Margarita Delgado's insights shed light on the intersection of the digital euro and private payment solutions. Her speech not only outlined the potential benefits but also emphasized the need for robust security measures and inclusive accessibility. As the ECB moves closer to the realization of the digital euro, its impact on private payment services and the broader financial landscape becomes increasingly evident.