The Paypers

The paper was issued on 13 May 2022 and aims to study issues like payment choices, privacy in the digital economy, and financial intermediation, suggesting that adopting a CBDC would be preferred to traditional digital payments, including bank deposits. The risk of adopting a CBDC would be particularly experienced by platforms that compete with banks in the market for financial services.

However, according to the European Central Bank, one of the main problems of cash is that it cannot be used in online transactions, even though it preserves anonymity. On the other hand, bank deposits can be used online but do not provide the same degree of anonymity to users, and imply additional costs, as well as a compliant GDPR agenda.

Digital currencies issued by tech platforms may allow merchants to hide from banks but enable platforms to suppress competition. As for the digital euro, people consider it is not compatible with protection of privacy or with data protection regulations and could lead to negative interest rates and the lose of freedom usually provided by cash.

ECB pushes digital coin despite mixed feelings from population