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What are the potential impacts of the digital euro on the financial stability in the euro area, and which measures can be taken to minimize the risks?

Henry de Frahan, Grégoire
(2023)

Files

HenrydeFrahan_7149-21-00_2023.pdf
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Details

Supervisors
Bertrand Candelon
Faculty
Louvain School of Management
Degree label
Master [120] en sciences de gestion, à finalité spécialisée
Abstract
The financial world has experienced significant changes in the previous years due to financial innovation. Central banks are now exploring the introduction of their digital currency: the Central Banking Digital Currency (CBDC). This paper focuses on the digital euro that the European Central Bank is developing. We analyze the potential impacts it could have on financial stability in the euro area. The literature will describe the potential positive and negative effects of the digital euro on financial stability based on several scientific articles. In the empirical part, we will study a scenario of outflows from commercial bank deposits to the digital euro. These 2 analyses will offer a clearer picture of the possible impacts of this new digital currency.