to model, but i am also convinced that they are crucial and must be taken into account when analysing the effects of a cbdc on welfare, economic growth and risks. central banks have a mandate to ensure stability – both monetary and financial – and are therefore naturally inclined to be prudent. but prudence should not mean inaction. the cost of not issuing a digital euro could be significant. central bank digital currencies would bring considerable benefits to digital payments. as the large technology companies further expand into digital finance, the availability of digital central bank money, together with effective regulation, would become necessary to ensure competition, privacy and the smooth functioning of payments and the financial intermediation process. as forward - looking policymakers, the central banks of the eurosystem are preparing – including through the possible issuance of a digital euro – to address the risks that the digital revolution poses to monetary and financial stability. carrying out this complex transition phase to the benefit of the well - being of everyone is the ultimate goal. thank you for your attention. keister, t. and monnet, c. ( 2020 ), ‘ central bank digital currency : stability and information ’, rutgers university and university of bern, mimeo. designed by the printing and publishing division of the bank of italy

financial services, thanks to their very large customer base and global operations. it is against this backdrop that we need to assess the merits of a digital euro. kosse, a., & mattei, i. ( 2023 ). making headway - results of the 2022 bis survey on central bank digital currencies and crypto. bis papers. https : / / www. ecb. europa. eu / press / pr / date / 2023 / html / ecb. pr231018 ~ 111a014ae7. en. html. today i will first examine the most important current shortcomings of the european digital payments market and the risk that these shortcomings will be exacerbated by the quest for dominance of technology platforms in a counterfactual scenario where a digital euro is not issued. i will then argue that the digital euro would offer clear advantages in ensuring a competitive, innovative, open and secure digital payment system, while maintaining the highest standards of privacy protection. i will also discuss how potential risks to the financial sector can be effectively mitigated through the careful design of safeguards. the counterfactual : technology firms ’ quest for dominance the rapid digitisation of payments is a prevailing trend that was accelerated by the covid - 19 pandemic. the share of payments made via mobile applications and the share of consumer online payments tripled in the euro area between 2019 and 2022. 5 consumers are clearly embracing the efficiency and convenience of digital payments. however, this transformation is associated with a number of challenges for the european payments market. while pan - european credit transfers and direct debits work thanks to european payment schemes and infrastructures, 6 this is not the case for cards and certain types of online payments – whose use is growing disproportionately. this means that, as digitalisation progresses, pan - european payments are in the hands of international players, increasing our dependence on the payment rails they provide. a handful of international companies dominate domestic and cross - border card and online payments. international card schemes operate payment networks that are exclusively compatible with their point - of - sale terminals. this situation raises barriers to entry and expansion and discourages potential competitors from setting up new payment networks. the situation remains largely unchanged despite regulatory initiative and competition law enforcement. 7 the decision of european banks to abandon their plans for a continent - wide card scheme is a stark illustration of the dominant position held by these firms. 8