Joachim Nagel, the president of the Bundesbank and a member of the European Central Bank (ECB), has emphasized the need for central banks to reconsider their business models and swiftly adopt central bank digital currencies (CBDCs) in order to secure their future. Nagel expressed his concerns about the uncertainty surrounding central banks during a panel session at the Bank for International Settlements’ Innovation Summit on May 6, hosted in Basel, Switzerland.
Reflecting on the past, Nagel noted that if he had been asked 20 years ago whether the central bank business model was susceptible to destruction, he would have confidently answered no. However, he now believes that central banks must adapt to the changing landscape by integrating distributed ledger technology, as physical money gradually becomes less appealing. Nagel stressed the urgency of this adaptation, stating, “We need to speed up on all this […]. If part of your core product is losing attractiveness, then you have to think about another new core product.”
Francois Villeroy de Galhau, a member of the European Central Bank from France, also discussed the role of central banks in relation to emerging technologies. During the BIS conference, Galhau proposed that banks consider utilizing digital currencies for both wholesale and retail transactions.
The European Central Bank is currently in the process of developing a digital version of the euro, having completed the investigation phase to determine its design and technical details. The ECB aims to finalize the project by October 2025.
Source:
BIS
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