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As most central banks across Europe scramble to develop their national central bank digital currencies (CBDCs), and the European Central Bank pushes the digital euro, Denmark sees no immediate need for a digital krone.

In a speech earlier this month, Danmarks Nationalbank Governor Signe Krogstrup delved into the surging rise in digital payments and the implications on the country’s financial and monetary stability.

Krogstrup believes it would be relatively easy to issue a wholesale CBDC for commercial banks as the central bank already gives central bank reserves. All that would change would be the technology on which it’s deployed, with a CBDC calling for distributed ledger technology (DLT).

However, a retail CBDC “goes far beyond technology.”

“Its introduction would change the structure of the financial system and the respective roles and demarcation lines between commercial banks, central banks, and other institutions in the provision of money,” he noted.

A total of 114 countries—representing 95% of global gross domestic product (GDP)—are exploring CBDCs, with 11 having already launched their digital currencies, data from the Atlantic Council shows. Their motivations to launch these CBDCs have varied, from financial inclusion to improving critical infrastructure and strengthening competition.

The decline of cash in daily payments has also been cited as a big factor in developing a CBDC. The European Commercial Bank (ECB) recently cited it as a key reason it’s creating the digital euro. In Europe, Mastercard (NASDAQ: MA), VISA (NASDAQ: V), and Amex (NASDAQ: AXP) dominate the debit card payments space, a cause of concern for the region’s central bank as digital payments spike. ECB President Christine Lagarde recently stated that a digital euro would give the residents an ECB-controlled alternative to these global payment rails.

The Danish central bank doesn’t believe the decline in cash usage poses any real threat.

“As already noted, based on what we know today, it is not clear to me that cash in the hands of private citizens is the anchor of trust in our monetary system, certainly not in Denmark,” Krogstrup noted.

Aside from CBDCs, the regulator believes that stablecoins, once regulated and fully backed, could become a key player in digital payments. Digital assets, however, are “speculative and high-risk assets with no underlying income flow or productive value,” he added.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: CBDCs and BSV

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