In my opinion, among the transforming effects of digitalisation in the financial sector, one stands out: the far-reaching change payment services are undergoing, both as regards the characteristics of the services per se, and the technology and players taking part. Undoubtedly, this is a significant phenomenon for central banks, given our responsibilities for promoting and ensuring the smooth functioning of payment systems. It is also significant in that digitalisation affords us new opportunities to redefine our role as providers of safe settlement assets. Indeed, as you know, within the Eurosystem we are, like many of our international counterparts, painstakingly analysing the possibility of issuing digital currency: a “digital euro” in our case. The digital euro would be a new form of central bank monetary liability which, like cash, would be conceived to be accessible both to households and non-financial corporations. As you can imagine, the introduction of such an instrument would be enormously complex and important. Accordingly, beyond the stimulating intellectual debate that opens up around its future possibilities, a thorough analysis is needed of its various implications and its possible configurations. Further, our role in this area obliges us to be technically ready should developments warrant its placement in circulation. The initiative to study the advantages and disadvantages of a digital euro stems from an ECB Governing Council decision to set up a high-level task force to further the analysis and 12  extend the knowledge of the Eurosystem in this field.
The ECB’s strategy review is very ambitious; not only does it analyse matters such as possibly adopting make-up strategies for past deviations of inflation from its target, but it also addresses additional topics such as the design and optimal use of the various monetary policy tools; the measurement of inflation; the interactions between monetary policy and macroprudential policy; the institution’s communication policy; and the impact of climate change, digitalisation and globalisation on monetary policy. All these facets and others covered by the strategic review may be relevant when delivering on our price stability mandate. 8  See, for example, Bernanke et al. (2019). See Box 2 of the “Quarterly report on the Spanish economy”, Economic Bulletin, 3/2020, Banco de España, for a description of this announcement and an assessment of its effects on financial markets. 9  10  Indeed, one of this review’s key topics will be the definition of the ECB’s price stability target. The current inflation target, aiming at inflation rates of below, but close to, 2%, may be reformulated. First, it may be necessary to clarify the specific level of inflation targeted, to make it easier for economic agents to understand. Second, making this target more symmetrical could also be possible, clarifying that the ECB would be as tolerant of overshooting as of undershooting.