Joachim Nagel, President of the Deutsche Bundesbank and a member of the ECB, emphasized the urgency for central banks to reassess their business models and swiftly adopt central bank digital currencies (CBDCs).Speaking at a high-level panel during the Bank for International Settlements (BIS) Innovation Summit on May 6, Nagel expressed concern over the uncertain future facing central banks. He noted a significant shift in perspective, saying:“If you would have asked me 20 years ago if the central bank business model was destroyable or not, I would have said no. Now I am not so sure anymore.”Nagel stressed the necessity for central banks to adapt to the evolving landscape, identifying distributed ledger technology (DLT) as a crucial tool in this transformation. He added:“We need to work on our business model. And DLT is just a means, an instrument that could help us here to get to that point.”Nagel also emphasized the importance of swift action due to the diminishing appeal of physical currency. He said:“We need to speed up on all this. If part of your core product is losing attractiveness, then you have to think about another new core product.”Bank of France governor Francois Villeroy de Galhau echoed Nagel’s sentiments, advocating for the integration of digital currencies into central bank operations. He, too, emphasized the need for central bank money to evolve in line with 21st-century demands, advocating for CBDCs to maintain stability within the financial system.The ECB is currently in the process of developing a digital version of the euro, with plans to finalize the project by October 2025. This initiative marks a significant step towards embracing the potential of digital currencies in the modern financial landscape.In parallel, the Swiss National Bank (SNB) recently revealed its pilot project, Project Helvetia III, which aims to explore the use of wholesale CBDC. Thomas J. Jordan, Chairman of the governing board of the Swiss National Bank, emphasized the importance of central bank money in ensuring financial stability and reinforcing its role as a cornerstone of the monetary system.However, Jordan cautioned against the issuance of a retail CBDC because it could destabilize the financial system. He added that the potential risks of retail CBDCs outweigh the benefits. Instead, he advocated for the use of wholesale CBDC to facilitate the secure and efficient settlement of tokenized assets.AJ, a passionate journalist since Yemen’s 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.CryptoSlate is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI. Your daily dose of must-have crypto news and deep dives. Direct to your inbox.The bank will also support Bitpanda’s treasury and payment processes.The German police said the seizure was the largest in its history.CoinShares reports minor outflows in cryptocurrency funds overshadowed by persistent high trading volumes and equity investments.Crypto investment products have recorded $1.76 billion worth of inflows during the past 10 weeks.CryptoSlate’s latest market report dives deep into the effects corporate Bitcoin purchases have on the market.Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
