Bundesbank pushes digital euro while defending gold storage abroad
The Bundesbank has weighed in on two major financial issues: the future of the digital euro and the storage of Germany's gold reserves. A decision on the digital euro is expected this year, while the central bank continues to defend its strategy for holding gold abroad.
The digital euro is being proposed as a way to offer Europeans an alternative to U.S.-dominated payment systems. Currently, around two-thirds of all transactions in Europe are handled by American companies. Burkhard Balz, a member of the Bundesbank's executive board, described the digital euro as a 'digital twin' of physical cash, not a replacement for it. The project aims to boost financial resilience across the continent by providing a European-run payment option.
The Bundesbank has also addressed concerns about Germany's gold reserves. Roughly two-thirds of these reserves are stored outside the country, primarily in New York and London. According to the bank, this arrangement ensures quick access to gold at key global trading hubs. While the Bundesbank has contracts with foreign central banks for storage, it does not disclose specific audit details or procedures.
A political decision on the digital euro could arrive before the end of the year. If approved, it would mark a step toward reducing reliance on non-European payment providers. Meanwhile, the Bundesbank maintains that storing gold abroad remains essential for financial flexibility and security.
