An executive at major Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) has raised concerns about the digital euro and questioned what customer demand it would meet.

Pablo Urbiola of BBVA’s digital regulation team has called on European financial authorities to carefully explore the possible issuance of a central bank digital currency (CBDC).

Urbiola said Friday at a European Banking Federation seminar that, despite the increasing need for a European CBDC, it is not yet exactly clear what kind of customer demand the digital euro is supposed to meet:

“Considering all the innovation that is taking place in the payments market, it is not clear which customer demands a digital euro could fulfil that may not be fulfilled by other initiatives.”

The executive emphasized that the European Central Bank should consider all the opportunities and risks of a digital euro, taking into account different design options. “It is essential that the general framework designed by the ECB is flexible enough, and that allows private players to develop business models in a competitive space,” Urbiola noted.

Urbiola said that the ECB wants to address the myriad challenges associated with the digital euro: “For instance, if a digital euro aims to respond to the decreasing use of cash, it should be designed as an electronic version of cash — that is, simple, easy to use, with basic functionality.” But if a digital euro aims to respond to the threat of foreign digital currencies, “it should be able to replicate some of the more advanced functionalities of these initiatives,” he noted.

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The exec said that banks in Spain are prepared for the arrival of a digital euro, stating that BBVA has participated in preliminary trials involving the issuance of the ECB’s digital currency alongside 15 other major banks. 

Urbiola’s comments come shortly after the ECB declared that the digital euro may be crucial in combating “artificial currencies” in cross-border payments. In early June, the ECB published its annual euro review, raising concerns over the rise of artificial currencies led by foreign tech giants, apparently referring to Facebook’s Diem project.