In Eswar Prasads A New Era for Money article from September 2022, he argues that central banks are contemplating issuing digital forms of central bank money for retail payments known as central bank digital currencies (CBDCs) in response to a range of key concerns. In Eswar Prasads A New Era for Money article from September 2022, he argues that central banks are contemplating issuing digital forms of central bank money for retail payments known as central bank digital currencies (CBDCs) in response to a range of key concerns. In Eswar Prasads A New Era for Money article from September 2022, he argues that central banks are contemplating issuing digital forms of central bank money for retail payments known as central bank digital currencies (CBDCs) in response to a range of key concerns. In Eswar Prasads A New Era for Money article from September 2022, he argues that central banks are contemplating issuing digital forms of central bank money for retail payments known as central bank digital currencies (CBDCs) in response to a range of key concerns.

(a)In the case of the digital euro being contemplated by the ECB, explain the key objectives and design considerations being evaluated. (20 marks)

(b)Prof. Prasad also concludes that digital central bank money is only as strong and credible as the institution that issues it.

With this in mind, analyse whether the arguments of a potential digital outweigh the disadvantages for the euro area.