Recently, the Digital Euro Association, a thinktank around the digitization of money, was launched to help shaping the discussion around the digitization of money — especially in the Euro area — to stimulate public discourse and act as a unified voice on digital money. In this article, we discuss current initiatives around the digitization of money and outline how the Digital Euro Association fits into this discussion.
Introduction of central bank digital and smart currency is just as much a political, macroeconomically and financial stability issue than a technology issue.
In this paper, the monetary-financial implications of two versions of Libra are analysed, i.e. Libra 1.0 and Libra 2.0. First, I briefly discuss how technological developments in monetary history have reshaped the payments landscape and how Libra is going to challenge the current bank-based ecosystem. Second, I identify some risks stemming from the current monetary-financial system and I review the Euro Area's regulatory framework to control these risks. Third, I assess how a wide acceptability of Libra's 1.0 and 2.0 could challenge the current monetary-financial structure and therefore the risks associated. Finally, I propose a Synthetic CBDC issuance, i.e., a narrow banking approach, to limit the new risk associated with the introduction of Libra 2.0.