Scotti: Digital euro ensures public money in digital economy
Chiara Scotti, Deputy Governor of Banca d'Italia, argued for the digital euro as essential to preserve public money in an increasingly digital economy. Speaking at the '6th Dolomiti Macro Meeting', she outlined how it addresses challenges in payments.
Cash's digital dilemma
Chiara Scotti highlighted the profound shift in payment behavior, with cash usage falling from 54 to 39 percent and online purchases doubling from 18 to 36 percent between 2016-2024.
This transformation means a growing part of economic life moves to environments where cash, as public money, cannot be used.
This creates three critical challenges: first, for the singleness of money, as public money becomes less present digitally; second, for efficiency and competition, given the concentration in card transactions where two schemes intermediate two-thirds of payments; and third, for resilience and strategic autonomy, due to heavy reliance on a small number of providers, often extra-European.
The recent Winter Olympics debate, where an exclusivity agreement became headline news, visibly underscored this transformation, making governance and resilience public-interest questions.
A common monetary foundation
The digital euro is conceived as digital public money, the digital form of European cash, designed to coexist with private solutions rather than replacing them.
Scotti emphasized its role as a public infrastructure, akin to roads or broadband networks, providing a common monetary foundation for a digital economy.
This is crucial for Europe, given its fragmented retail payment market where non-European schemes dominate.
The project aims to ensure private innovation builds upon a base that preserves money's public good properties: singleness, trust, accessibility, monetary sovereignty, and resilience.
Design is decisive, not abstract
The speech underscores that the digital euro's success hinges entirely on its meticulous design, a point heavily informed by academic research.
It attempts to strike a delicate balance: making the digital currency useful enough for transactions without becoming an attractive store of value that destabilizes bank deposits.
While addressing critical market failures, the project's real challenge lies in its practical implementation to avoid unintended consequences.