this post was submitted on 21 Mar 2025
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I personally feel that this speech doesn't address many issues regarding the CBDC. The most obvious imho is that ths is not a competition between the digital euro and private payment systems, nor is it an issue of digital euro versus stablecoins, as the speech appears to address.
The most pressing problem with stablecoins allegedly is a lack of transparency and regulation (what Mr. Lane suggests), as no none knows whether or not the provider maintains full reserves (Tether, a stablecoin with links to China that has reportedly also been used in Chinese-Russian trade to circumvent Swift sanction imposed by the West, has reportedly been failing in the past to present audits showing sufficient asset reserves). I agree that stablecoins appear to be a problem from this point of view (partly also because it may negatively effect commercial banking and credit business, as the speech also suggests), but I would not only focus on stablecoins when it comes to alternatives to our modern money.
"An evolutionary process towards a flexible but stable monetary system", to quote the speech, must not only entail the digitization of our fiat money, but the creation of a wide range of private currencies that are about to complement -rather than substitute- the future currency universe. Mr. Lane addresses this briefly in his speech, but then appears to offer 'only' CBDC as a solution. What we needed, however, are complementary currencies for different use cases. The digital euro is important, but only one part of the solution imho.
Private payment systems can (and should, imo) only be addressed by other private service companies. If we want an alternative for Paypal in Europe, we need something like Wero or the GNU Taler. It depends on the use case.
One major point with the digital euro is privacy. As for now, the planned so-called 'offline digital euro' -supposed to be used for very small everyday payments, e.g., you would bump your phone wallet to pay your restaurant bill, or you may even have a prepaid card rather than a phone- might be really private (to the best of my knowledge, interpreting the current plans). If you are using this offline version, the only people who have access to the payment data are you and the person/organization you pay. All checks are made only if you top up your digital wallet with your bank. (There is, however, a plan to combat criminal attempts and fraud, so it is not clear yet whether or not there will be a way for commercial banks -or the central bank- to use private data for this as the plans are not yet clear about it, afaik).
The online version of the digital euro is much trickier when it comes to privacy. According to the current plans, only your bank would see your full data (namely your transactional data and your identity), while the central bank would see your transactional data, but not your identity. However, such 'pseudonymity' is a much greater problem as it initially may seem as we know. First, a single transaction that would link your account to your identity could reveal immediately the entire data set; and, second, any change in the law -for example, a new government may hold a different view on privacy and introduces new rules- could undermine the privacy of people completely.
As Mr. Lane concludes,
Although I agree with this view in principle, controlling Europe's monetary and financial destiny is not about the digital euro alone. We need also private, complementary currencies as well as European alternatives to the private payment service providers currently dominated by U.S. companies.