Regulatory Alerts2026-06-25
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Fritzi Köhler-Geib: As Private Digital Money Spreads, Digital Central Bank Money Becomes More Important
Bundesbank Board Member Fritzi Köhler-Geib warned that the spread of private digital money increases the systemic importance of digital central bank money to mitigate risks like weakened monetary transmission and loss of control over public tasks. She emphasized the necessity of clear regulations, transparent reserve requirements, and effective supervision for stablecoins, highlighting the essential role of frameworks like MiCAR in Europe. Köhler-Geib also underscored the critical importance of bilateral cooperation and shared infrastructure projects between the Deutsche Bundesbank and the Banca d'Italia.
© Gaby Gerster
25.06.2026
EN
"In the digital payment environment of the future, private and public digital money will likely coexist," said Bundesbank Board Member Fritzi Köhler-Geib during a fireside chat with Chiara Scotti, Vice President of the Banca d'Italia, at Villa Vigoni in Menaggio, Italy. The discussion took place as part of a research workshop on payment systems and digital assets, jointly organized by the Banca d'Italia and the Deutsche Bundesbank.
Future of Money, Digital Euro, Digital Central Bank Money for Large-Value Payments
Köhler-Geib and Scotti discussed, among other things, the future of money and digital payment ecosystems. With regard to the interactions between public and private money, Köhler-Geib stated that digital central bank money would become increasingly important as private digital money spreads.
If dollar stablecoins or payment infrastructures established in the United States acquire systemic significance outside the USA, currency areas that cannot offer public digital money themselves are exposed to certain risks, said Köhler-Geib. She cited the weakening of monetary policy transmission, dependence on platforms not democratically legitimized within one's own legal order, and the dwindling control over a central public task.
Furthermore, Köhler-Geib and Scotti exchanged views on how the relationship between the public and private sectors would be fundamentally changed by innovations in digital assets. This also included possible risks that large private digital currencies pose to monetary sovereignty and financial stability.
While the risks associated with stablecoins are known, they are exacerbated by the higher speed of transactions. To address these challenges, we need clear regulations, transparent reserve requirements, and effective supervision. In Europe, framework regulations such as the MiCAR Regulation are essential, and we must continuously refine and improve these regulations, emphasized Köhler-Geib.
Cooperation between Banca d'Italia and Bundesbank
Köhler-Geib and Scotti also spoke about the cooperation between their institutions. Both central banks jointly operate European infrastructures such as TARGET and have already collaborated on several Eurosystem-wide projects.
Events like these are crucial for building bilateral relationships and deepening our cooperation, said Köhler-Geib.