Private and public digital money will likely coexist in a future digital payment ecosystem, Executive Board Member Fritzi Köhler-Geib said during a fireside chat with Chiara Scotti, Deputy Governor of Banca d’Italia, at Villa Vigoni in Menaggio, Italy. The chat was part of a research workshop on payments and digital assets, jointly organised by Banca d’Italia and the Bundesbank.

Future of money, digital euro, wholesale CBDCs

Amongst other topics, Köhler-Geib and Scotti discussed the future of money and of digital payment ecosystems. Reflecting on the interplay between public and private money, Köhler-Geib said that the case for CBDC was growing stronger as private digital money scaled up: If dollar stablecoins or US-based payment infrastructures become systemic outside of the United States, a jurisdiction without a domestic public digital alternative runs the risk of experiencing weakened monetary policy transmission, dependence on platforms without democratic accountability in their own jurisdiction, and diminished control over a core public function.

Furthermore, their exchange focused on the question of how digital asset innovation would reshape the interaction between the public and private sector. Köhler-Geib and Scotti also further explored the possible risks that large private digital currencies posed to monetary sovereignty and financial stability. Stablecoins bring familiar risks but amplify them with faster transactions. To address these challenges, we need clear regulations, transparent reserve requirements, and effective oversight. In Europe, frameworks like MiCAR are essential, and it is crucial that we continue refining and improving them, Köhler-Geib highlighted. 

Collaboration between Banca d’Italia and Deutsche Bundesbank

During the chat, Köhler-Geib and Scotti reflected on the collaboration between their central banks. The two institutions operate European infrastructures such as TARGET together and have previously worked together in several projects in the ESCB context.

Conferences like this one are key to building bilateral relationships and further strengthening our cooperation, Köhler-Geib stressed.