Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.
Digital euro – potential implications for payments, fixed exchange rate policy and financial stability in Denmark
The European Central Bank and the European Commission are working on the development of a digital euro and the accompanying regulatory framework. A potential future decision on issuing a digital euro is still pending, and a number of design choices and rules have yet to be clarified. Denmark is closely linked to the euro area through, for example, the fixed exchange rate policy, payment systems and financial conditions. If a digital euro becomes a reality, it may therefore have implications for Denmark. This analysis describes the potential implications a digital euro can pose to safe and efficient payments, the fixed exchange rate policy and financial stability in Denmark.
Key messages
Why is this important?
Digitalisation is transforming both our society and the financial sector. Many central banks are investigating issuance of central bank digital currencies and associated questions. Under the auspices of the European Central Bank, work is being done in relation to the introduction of a central bank digital currency for individuals and businesses in the euro area– a so-called ‘digital euro’. At Danmarks Nationalbank, we are monitoring technological developments, including other countries’ work with new types of assets and payment solutions.
Main chart
A digital Euro will be a means of payment, a payment solution and a payment system
Note:
Functionalities that a digital euro is likely to possess.
Source:
Danmarks Nationalbank. The chart is based on material from the European Commission and the European Central Bank.