Name: Crypto Canvas - Decoding the Digital Euro
Uploaded: 2024-03-14T10:40:32.207Z
Duration: 445.72
Description: Crypto Canvas explores with Ville Sointu, Chief Strategist, Digital Currencies at Nordea, at Finovate Europe the development and implementation of the Digital Euro into the European society.

Crypto Canvas - Decoding the digitial euro.mp4

Crypto Canvas - Decoding the digitial euro.vtt

ENGLISH

{{00:00:16}}
The Digital Euro project, as far
as the ECB has stated publicly

{{00:00:20}}
has a very clear goal for digital
inclusion and financial inclusion.

{{00:00:26}}
And the way they want to make that happen
is that on a high level, it's very simple.

{{00:00:31}}
When there is a public option for
payments and for you to deposit money,

{{00:00:36}}
even hold money to a certain extent.

{{00:00:39}}
When there's a public option, the
private sector also has to compete.

{{00:00:44}}
Again, having a public option,
in a way, should guarantee

{{00:00:47}}
more competition in this area.

{{00:00:50}}
It's also good to note that the Digital
Euro does not seek to undercut the private

{{00:00:54}}
sector as far as the ECB stated goals are.

{{00:00:57}}
So they will be at par with private
sector solutions, but reducing the

{{00:01:04}}
reliance on only private sector.

{{00:01:06}}
When it comes to digital payments,

{{00:01:17}}
the design of the digital
euro is still under process.

{{00:01:20}}
So a lot of the technical details
in, terms of how the security will

{{00:01:24}}
be implemented, how do we how,
does the ECB and the related and

{{00:01:28}}
the other parties in the ecosystem
guarantee the safety of the system.

{{00:01:33}}
But the very clear principle that
they have is that the security and

{{00:01:38}}
the requirements and the risk controls
will be at par with existing solutions.

{{00:01:43}}
That's why there's the they're
going to re reuse the same know

{{00:01:46}}
your customer principles, the same
anti money laundering rules, same

{{00:01:50}}
counter terrorist financing rules.

{{00:01:52}}
They're going to have very strict
fraud prevention systems in place.

{{00:01:55}}
That's what the, goal at least is so far
and will of course continue to be as well.

{{00:02:03}}
What security we have today the
digital euro will have that.

{{00:02:08}}
And then there's of course,
strive to have more as well.

{{00:02:12}}
The the technical details of the
implementation still remain to be seen.

{{00:02:17}}
But the from what, we know about the
conversation so far, it's fairly clear.

{{00:02:22}}
that will be at the, at level
or better than existing systems.

{{00:02:35}}
I think the focus for the
digital euro is quite simple.

{{00:02:38}}
It is really about the conversion of
commercial bank money into central

{{00:02:42}}
bank money in a digital environment.

{{00:02:44}}
Now, if you look at the practicalities
around that, of course there, there's

{{00:02:48}}
a way for you to move commercial bank
money from your regular bank account.

{{00:02:52}}
into a digital euro wallet or account or
a pocket, however you want to call it.

{{00:02:58}}
But this conversion is
at the center of that.

{{00:03:01}}
Now, there's going to be different
levels of automation when it

{{00:03:04}}
comes to the transfer of this
value between these two accounts.

{{00:03:08}}
And things like water for models
have been discussed in the past.

{{00:03:13}}
So this would allow the users
of the digital euro to pay

{{00:03:16}}
even for larger amounts beyond
the holding limit the upcoming

{{00:03:21}}
holding limit of the digital euro.

{{00:03:23}}
A lot of the focus is around that.

{{00:03:25}}
Now, in terms of interoperability, that
automatically solves the interoperability

{{00:03:30}}
between existing commercial bank
systems and the upcoming digital euro.

{{00:03:35}}
Because cryptocurrencies are at the moment
not considered commercial bank money,

{{00:03:42}}
there's always going to be a commercial
bank money bridge between crypto assets or

{{00:03:47}}
the other kinds of digital assets before
it will reach the digital euro system.

{{00:03:54}}
That is the current ban.

{{00:03:55}}
So like I was telling you in the
previous answers, All of these things

{{00:03:59}}
are still bound to change as the
process is still ongoing for the

{{00:04:03}}
potential digital euro very much.

{{00:04:15}}
Maybe it's not the right way to say that
the digital euro wants to be competitive.

{{00:04:21}}
I don't think that's the right
approach to the whole topic.

{{00:04:24}}
The reason why any public sector project
happens, especially when it's in a

{{00:04:28}}
domain as intense and security related
as, financial services, They only do

{{00:04:35}}
it to balance the existing system.

{{00:04:39}}
For all intents and purposes, if the
usage of the digital euro remains fairly

{{00:04:43}}
small, the ECB might still fulfill all
of their goals for the digital euro.

{{00:04:50}}
They are not looking
to make profit with it.

{{00:04:52}}
They're not looking to make money.

{{00:04:54}}
That's the difference between the
public and the private sector.

{{00:04:57}}
They want to make it
sustainable, of course.

{{00:04:59}}
It cannot be very expensive for the
taxpayers in the long run, at least.

{{00:05:04}}
But, I think it's a wrong framing to
say that it it wants to be competitive.

{{00:05:10}}
I think if, all the goals of
the digital euro are achieved.

{{00:05:14}}
The private sector will be cheaper,
faster, better, because they have to

{{00:05:18}}
run faster than the public sector.

{{00:05:21}}
It is an interesting balance that
they seek to seek to find with

{{00:05:25}}
with this project and remains to
be seen how they succeed in that.

{{00:05:37}}
The major reason why ECB wants to
do the Digital Euro is the fact that

{{00:05:42}}
today, if you want to have a central
bank liability in your, hands, in your

{{00:05:46}}
pocket, in your ownership, the only
way to do that as a private citizen is

{{00:05:50}}
to have physical cash in your pocket.

{{00:05:53}}
Now, the digital euro seeks
to be a digital complement or

{{00:05:57}}
digital version of that cash.

{{00:05:59}}
And that is a critical part of
remaining relevant in in being able to

{{00:06:06}}
have the goals that you just stated.

{{00:06:08}}
So again, financial stability, having
control, having maintaining a competitive

{{00:06:14}}
ecosystem in the financial services.

{{00:06:16}}
All of these goals can be reached
better if there is a digital version of

{{00:06:19}}
a central bank liability, that's what
the ECB at least has stated so far.

{{00:06:27}}
We have to remember that the role of cash
has been very dominant in the history,

{{00:06:31}}
but now this role is diminishing.

{{00:06:34}}
Most of the payments happen today.

{{00:06:36}}
Most of spending happens today
online in fully digital forms and

{{00:06:40}}
for all intents and purposes the
central banks are excluded from

{{00:06:44}}
those, payments and that, that part
of the stack, of course by design.

{{00:06:49}}
But that's what they're looking to do now.

{{00:06:51}}
So they're looking to change the design
of that stack so that there is always

{{00:06:54}}
a public option for you as a private
citizen to be able to pay with a central

{{00:06:58}}
bank liability when you are online.

{{00:07:01}}
Again, it is taking a bit of a
different position in the ecosystem

{{00:07:05}}
and the ECB has feels that their goals
in terms of maintaining stability in

{{00:07:10}}
the overall ecosystem and maintaining
the European sovereignty for

{{00:07:14}}
payments is reached better this way.

The Digital Euro project, as far
as the ECB has stated publicly

has a very clear goal for digital
inclusion and financial inclusion.

And the way they want to make that happen
is that on a high level, it's very simple.

When there is a public option for
payments and for you to deposit money,

When there's a public option, the
private sector also has to compete.

Again, having a public option,
in a way, should guarantee

It's also good to note that the Digital
Euro does not seek to undercut the private

sector as far as the ECB stated goals are.

So they will be at par with private
sector solutions, but reducing the

the design of the digital
euro is still under process.

So a lot of the technical details
in, terms of how the security will

be implemented, how do we how,
does the ECB and the related and

the other parties in the ecosystem
guarantee the safety of the system.

But the very clear principle that
they have is that the security and

the requirements and the risk controls
will be at par with existing solutions.

That's why there's the they're
going to re reuse the same know

your customer principles, the same
anti money laundering rules, same

They're going to have very strict
fraud prevention systems in place.

That's what the, goal at least is so far
and will of course continue to be as well.

What security we have today the
digital euro will have that.

And then there's of course,
strive to have more as well.

The the technical details of the
implementation still remain to be seen.

But the from what, we know about the
conversation so far, it's fairly clear.

that will be at the, at level
or better than existing systems.

I think the focus for the
digital euro is quite simple.

It is really about the conversion of
commercial bank money into central

Now, if you look at the practicalities
around that, of course there, there's

a way for you to move commercial bank
money from your regular bank account.

into a digital euro wallet or account or
a pocket, however you want to call it.

But this conversion is
at the center of that.

Now, there's going to be different
levels of automation when it

comes to the transfer of this
value between these two accounts.

And things like water for models
have been discussed in the past.

So this would allow the users
of the digital euro to pay

even for larger amounts beyond
the holding limit the upcoming

Now, in terms of interoperability, that
automatically solves the interoperability

between existing commercial bank
systems and the upcoming digital euro.

Because cryptocurrencies are at the moment
not considered commercial bank money,

there's always going to be a commercial
bank money bridge between crypto assets or

the other kinds of digital assets before
it will reach the digital euro system.

So like I was telling you in the
previous answers, All of these things

are still bound to change as the
process is still ongoing for the

Maybe it's not the right way to say that
the digital euro wants to be competitive.

I don't think that's the right
approach to the whole topic.

The reason why any public sector project
happens, especially when it's in a

domain as intense and security related
as, financial services, They only do

For all intents and purposes, if the
usage of the digital euro remains fairly

small, the ECB might still fulfill all
of their goals for the digital euro.

They are not looking
to make profit with it.

That's the difference between the
public and the private sector.

They want to make it
sustainable, of course.

It cannot be very expensive for the
taxpayers in the long run, at least.

But, I think it's a wrong framing to
say that it it wants to be competitive.

I think if, all the goals of
the digital euro are achieved.

The private sector will be cheaper,
faster, better, because they have to

It is an interesting balance that
they seek to seek to find with

with this project and remains to
be seen how they succeed in that.

The major reason why ECB wants to
do the Digital Euro is the fact that

today, if you want to have a central
bank liability in your, hands, in your

pocket, in your ownership, the only
way to do that as a private citizen is

Now, the digital euro seeks
to be a digital complement or

And that is a critical part of
remaining relevant in in being able to

So again, financial stability, having
control, having maintaining a competitive

All of these goals can be reached
better if there is a digital version of

a central bank liability, that's what
the ECB at least has stated so far.

We have to remember that the role of cash
has been very dominant in the history,

Most of spending happens today
online in fully digital forms and

for all intents and purposes the
central banks are excluded from

those, payments and that, that part
of the stack, of course by design.

But that's what they're looking to do now.

So they're looking to change the design
of that stack so that there is always

a public option for you as a private
citizen to be able to pay with a central

Again, it is taking a bit of a
different position in the ecosystem

and the ECB has feels that their goals
in terms of maintaining stability in

the overall ecosystem and maintaining
the European sovereignty for

FinovateEurope

Finovate

Crypto Canvas

Expert Insight

Crypto Canvas explores with Ville Sointu, Chief Strategist, Digital Currencies at Nordea, at Finovate Europe the development and implementation of the Digital Euro into the European society.

CBDCs

Digital Euro

Blockchain Crypto

medium_Ville-Sointu-iVBORw0KGg-e8d479866dd2c73b44d5380ac4f763bc.png

small_Ville-Sointu-iVBORw0KGg-e8d479866dd2c73b44d5380ac4f763bc.png

thumbnail_Ville-Sointu-iVBORw0KGg-e8d479866dd2c73b44d5380ac4f763bc.png

xsmall_Ville-Sointu-iVBORw0KGg-e8d479866dd2c73b44d5380ac4f763bc.png

Ville-Sointu-iVBORw0KGg-e8d479866dd2c73b44d5380ac4f763bc.png

Ville Sointu

Discover insights from other experts

Head of Mobile Financial Services Solutions & Strategy

How does the digital euro aim to enhance financial inclusion and accessibility, particularly for unbanked or underbanked populations within the Eurozone? 

What technological infrastructure and security measures are being implemented to safeguard against potential cyber threats and ensure the integrity of digital euro transactions? 

Can you explain how the digital euro will work with other payment systems and cryptocurrencies, and how this is being considered in its design and rollout? 

Considering the evolving landscape of central bank digital currencies (CBDCs) globally, how does the digital euro project position itself to maintain competitiveness and relevance in the international fintech arena? 

In what ways does the digital euro initiative address concerns regarding monetary sovereignty, financial stability, and the role of the European Central Bank (ECB) within the Eurozone's monetary framework? 