B. Fostering “co-opetition” between established players and new entrants Innovation is often associated with FinTech firms and challengers, such as the start-ups that build success from an ability to focus their business and cut costs for a specific service or link in the payment chain. Yet commercial banks, which have traditionally been a major force in payments, also play a key role in innovation. Likewise, the main card schemes helped to drive the emergence of new payment methods, such as contactless payments and mobile payment terminals. Through partnerships, acquisitions and incubation projects, but also by harnessing in house R&D, established participants have expanded their service offerings to add new solutions, while developing competition and cooperation with new entrants. “Co-opetition” relationships are a  deep-rooted feature of the payment industry and are proven to generate value. The challenge now is to nurture them over the long run, taking care to ensure that relationships with BigTech firms are included. This is because the potential network effects enjoyed by BigTech payment solutions and the upstream payment chain positions of these firms could create risks of competitive distortion, particularly in situations where these participants also provide hardware or software components. Users could find themselves effectively captives of an ecosystem and left with no choice in terms of payment service, or at least be influenced by BigTech firms to use their services at the expense of competitors.
A first report will be presented by summer 2021 to the Governing Council,  which will then decide whether to extend the analytical work by carrying out an investigatory phase. In the end, the challenge is to determine whether and in what way a central bank digital euro is necessary. Key areas of analysis include a consideration of ways to prevent a digital euro from leading to excessive conversion of bank deposits into CBDC, which could disrupt bank 3/4  BIS central bankers' speeches  refinancing and banks’ capacity to lend to the real economy, in turn destabilising the financial system and financing of the economy. A report published by the Bank for International Settlements and seven central banks in October 2020 stressed that three foundational  principles must govern any CBDC-related decisions: do not compromise overarching public policy objectives such as monetary and financial stability; organise coexistence with other forms of public and private money; and promote innovation and efficiency in the financial system. If the decision were taken to introduce a central bank digital euro, this currency would also have to help to strengthen the sovereignty and competitiveness of the European payment market, while interacting smoothly with EPI. Finally, we believe there is a form of continuity between a retail CBDC and an interbank CBDC: logically, a retail digital euro should be able to rely on a CBDC for interbank settlement purposes to support optimal circulation.