Training Day is the first day of each ECB Simulation Conference for university students, where distinguished representatives of institutions, the market and academia share their knowledge and experiences with the conference participants.
The Training Day of the 7th ECB Simulation Conference was held at the Amphitheater of the Karatza Megaron of the National Bank of Greece on the 15th of December 2023 (the remaining days, 16-18 of December, were held at the Troias Building of the Athens University of Economics and Business). The examined topics of the Conference were:
- Interaction of Monetary and Fiscal Policy.
- Inflation: causes and tools for tackling it.
- Monetary Policy: Its response and efficiency in a Perma-Crisis environment.
- ESG transformation in the financial sector and its challenges.
- Challenges of adopting a Digital Euro solution.
Here we present the remarks of the speakers that participated in the first discussion panel the focused on the Digital Euro Project. In this discussion panel, we were honored to have Mr. Antonis Ballis, Assistant Professor in Finance & Programme Director of MSc in Finance & MSc in FinTech at Aston University, Mr. Christos Kallandranis, Assistant Professor in Finance at the Department of Accounting and Finance at the University of West Attica and Mr. Dimitris Anastasiou, Visiting Professor at the Athens University of Economics and Business.
The first panel of the Training Day commenced with Mr. Antonis Ballis, Assistant Professor in Finance & Programme Director of MSc in Finance & MSc in FinTech at Aston University, delving into the categories of digital money, emphasizing the Digital Euro. Initially, the Digital Euro was presented as a natural outcome of the FinTech industry, which has been rapidly developing in the past 15 years. According to Mr. Ballis, the creation of Bitcoin (whose initial goal was to replace existing forms of money was unsuccessful) triggered the rapid growth of the Fintech industry, which changed the landscape of payment systems.
Mr. Ballis then pointed out that the definition of digital currency is broad as it covers different types of digital currencies, presenting the main categories of digital currencies. In particular, the three main categories of digital currencies are as follows: (a) cryptocurrencies; (b) virtual currencies; and (c) central bank digital currencies. On the digital euro, he explained that we cannot yet provide a comprehensive description as it has not been developed and there is no clear information on how it will operate. Mr. Ballis stressed, however, that it will serve as a complementary payment option to cash (or any other payment system), without replacing it. He concluded his presentation by highlighting the potential of the digital euro in making the euro area independent of third-party payment systems.
The panel discussion proceeded with Mr. Christos Kallandranis, Assistant Professor in Finance at the Department of Accounting and Finance at the University of West Attica, who focused on the evolution of the euro into also a digital currency that will coexist with its other forms, as a result of digital transformation.
Mr. Kallandranis highlighted the digital euro as an opportunity for the ECB, the central banks, and the economy in general, due to the added value of the services it is expected to provide and the development of a payment system that can compete effectively with third-party providers from outside the Eurozone. Additionally, he clarified that the launch of the digital euro would not expand the ECB’s balance sheet, as an equivalent amount of existing money would be “replaced” with digital euros. Furthermore, he identified as a key point the development of the necessary legislative framework for the circulation of the digital euro, stressing the need for it to function as legal tender, safeguard users’ personal data, and provide zero-cost transactions. In conclusion, Mr. Kallandranis underscored that the evolution of the currency is both inevitable and a logical progression, given the ongoing transformation of our society and economy.
The panel discussion concluded with remarks from Mr. Dimitris Anastasiou, Visiting Professor at the Athens University of Economics and Business, who emphasized on the significance of the digital euro as a complementary form of transactions.
Mr. Anastasiou delved into the Reverse Waterfall mechanism, illustrating how it can make the digital euro a convenient payment solution. He then pointed out the ECB’s commitment to enabling offline use of the digital euro, promoting financial inclusion. Highlighting the potential benefits, Mr. Anastasiou stressed that adopting the digital euro would enhance the efficiency of interbank and cross-border transactions, facilitating the free movement of capital and promoting international trade. He also emphasized the associated risks of incorporating the digital euro, including a potential squeeze on lending and deposit interest rate margins, cybersecurity risks, and the potentially high costs linked to technological advancement. In concluding his speech, Mr. Anastasiou underscored the necessity of establishing an appropriate legal framework to mitigate negative impacts and promote the positive effects that adopting the digital euro could bring to the banking sector.