In a previous article, we pointed out a number of technical problems related to the Digital Euro (DE) and the expected benefits for the users. To make a long story short, the costs and risks of the project seem greater than the benefits. We now add some thoughts about the ECB monetary policy.
The ECB does not give the impression it has a clear view about how to inject DEs into the economy. Moreover, it is mired in deciding how to acquire assets to hold against the DEs it will be issuing. Buying bonds from banks and paying them with DEs is an option. However, it would run against the ECB’s intention to limit the use of DE to individuals.