ECB Considers Digital Euro for Securities Settlements

The European Central Bank is discussing how to improve and modernise CBDC services that it already offers.


A recent speech by Fabio Panetta, a member of the European Central Bank (ECB) Executive Board, revealed that the bank is considering using the digital euro for wholesale purposes, especially for payments and securities settlements in Europe.

Insisting that wholesale CBDC has existed for decades, Panetta said that it has provided efficient digital infrastructure for the settlement of transactions between banks in central bank money. According to him, the central bank is not debating whether to introduce them, but instead discussing how to improve and modernize the CBDC services that it already offers today.


He pointed out that there is a need to modernize CBDCs, as such efforts are necessary for market participants to remain confident that they can always settle systemically important wholesale liquidity and securities transactions with central bank money.

According to Panetta, central bank money should remain available for the public to use everywhere in the euro area for day-to-day transactions, not just in its physical form, but in digital form too.

The main goal of the ECB is to ensure that central bank money remains the anchor of stability of the monetary system, stated Panetta.

With a focus not only on people’s daily transactions but on the infrastructure that underpins the smooth functioning and stability of the financial system, Panetta said, “we are also actively working to modernize the payment infrastructure underpinning our financial system.”


“The digitalization of finance has broadened the available payment options. Fintech start-ups have emerged. Big techs have entered the payments market, capitalizing on the networks they operate. The crypto universe has boomed and burst,” he said. “These disruptions show that we need to preserve – at all times – an anchor of stability for the monetary and payments systems. Safeguarding this anchor is what our digital euro project is about.”

However, it was observed that the use of stablecoins could magnify risks such as central bank money having a reduced role in settlement processes, as well as trading and liquidity becoming fragmented. “As we have seen in recent months, stablecoins are prone to runs. In other words, they are stable in name only. And allowing them to be fully backed with central bank money would effectively outsource the provision of central bank money to private entities, endangering monetary sovereignty,” he said.

On the Flipside

  • The possibility of people replacing traditional deposits with CBDC continues to pose a risk for the ECB.

Why You Should Care

The ECB strongly believes that an innovative infrastructure could act as a catalyst for innovation within Europe and beyond for wholesale CBDC payments. If the execution of the plan is right, the ECB may set a precedent.

Read more about thte ECB’s efforts with the Digital Euro:

The ECB Could Establish a Cap for Digital Euros in Circulation

Learn about the ECB’s public consultation efforts when it comes to the Digital Euro:

ECB Opens Public Consultation on the Issuance of the Digital Euro

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Akriti Seth

Akriti is a Zurich-based reporter, focused on the political, regulatory, and legislative developments around crypto. She is a business journalist with over six years of experience working as a correspondent for organizations like Channel NewsAsia and Bloomberg TV India. In that time, Akriti has covered news in the finance, pharma, and state sectors.