Joachim Nagel, President of the Deutsche Bundesbank and an ECB member, stressed the urgent need for central banks to rethink their operational models and promptly embrace central bank digital currencies (CBDCs).

Speaking at a Bank for International Settlements (BIS) Innovation Summit panel, Nagel expressed concerns about the uncertain future of central banks, reflecting on a significant shift in perspective over the past two decades.

He emphasized the importance of adapting to the changing landscape, highlighting distributed ledger technology (DLT) as a key enabler in this process. Nagel urged swift action due to the declining appeal of physical currency, emphasizing the necessity for central banks to explore new core products.

Francois Villeroy de Galhau, Governor of the Bank of France, echoed Nagel's sentiments, advocating for the integration of digital currencies into central bank operations to meet 21st-century demands and maintain financial stability. The ECB's ongoing development of a digital euro aims to embrace the potential of digital currencies, with plans for completion by October 2025.

Concurrently, the Swiss National Bank's Project Helvetia III explores wholesale CBDCs to enhance the settlement of tokenized assets, underlining the importance of central bank money in ensuring financial stability.

However, Thomas J. Jordan, Chairman of the Swiss National Bank's governing board, cautioned against retail CBDC issuance, citing potential risks that outweigh the benefits, and instead advocated for wholesale CBDCs for secure asset settlement.