Technology and innovation

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.

The European Central Bank is working on her own digital currency: the Digital Euro (DE). Several details are provided in the specific ECB report. There are still many technical problems to solve and structural choices to make before implementing DE. Yet, some features seem clear. DE would be a new technology to use the euro, and will present both cash and deposit-money features. Three sets of reasons back the project. It aims at improving the public payment system on the user’s side; improving the effectiveness of monetary policy and protecting the transmission mechanism; answering some strategic and geopolitical concerns. The first set of issues is discussed in this contribution. A following article will examine the remaining topics.

Occasional sleeping in a shared flat; getting a lift from the airport to the city centre; moving house with the help of a bunch of students – an increasing number of people uses the diverse, often inexpensive offers of digital platforms such as Airbnb, Uber, or TaskRabbit. Although the economic significance of such digital platforms is still modest, the demand for deliveries has surged during the pandemic and it may further rise in the future.

Gallup conducted a panel survey in the very days the Pfizer and BioNTech COVID-19 vaccine was certified as effective. According to the survey, only 63% of Americans agree to be vaccinated against Covid-19. Things are similar in other Western countries. An article published by Nature Medicine last October (Jeffrey V. Lazarus et al, A global survey of potential acceptance of a COVID-19 vaccine) surveyed 13,426 people in 19 countries, and examined potential acceptance rates and factors influencing acceptance of a COVID-19 vaccine. Only 71.5% of participants reported that they would be likely to take a COVID-19 vaccine.

WP 2019-05.

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