Episode 4: Why do we need a digital euro, who will create it and when will it exist?
In the fourth and final episode of the four-part series on the digital Euro, Alexander Bechtel and Manuel Klein address the crucial question of why the euro should be digitized and which institution will ultimately provide it. After a detailed analysis of the existing money system in the first episode, as well as a description of the digital euro issued by the public and private sector in the second and third episode, the last episode provides an outlook into the future and presents concrete use cases of the different forms of the digital Euro. The goal of the episode is to understand which benefits a Digital Euro will bring, which institutions will provide it for which purposes, and when we will see the Digital Euro.
In the beginning of the episode, the different motivations to create a Digital Euro are presented. Here, Alexander and Manuel distinguish between the technological perspective of end users - especially in the financial and manufacturing industries - and the perspective of central banks. The aim of this episode is to understand that central banks have different motives for issuing digital money than some tech-savvy citizens might assume. This is because, unlike what you often read in the media when CBDC is discussed as the savior of the blockchain-based economy, central banks are much less focused on the technical side of a digital euro than it seems. Rather, it remains unclear whether a retail CBDC will be built on "state of the art" blockchain technology which enables machine-to-machine payments and programmable payments.
Moreover, it remains unclear whether a wholesale CBDC will soon be available to meet the demand for the technological benefits of blockchain technology in the financial and interbank payment-system and digital capital markets. Alexander and Manuel therefore look into the future of money, describe which institutions are likely to provide the tokenized digital euro for which specific use cases and when to expect the respective forms of the digital euro.
Finally, they summarize the past four episodes in three "key takeaways." These points should help listeners remember the core theses of the large content of the past episodes in order to have a say in the exciting topic of digital money.