To maintain Poland’s capacity to freely conduct its monetary policy, the country’s authorities will need to make a choice: join the eurozone, or launch a national central bank digital currency (CBDC), according to Marek Dietl, CEO of the state-controlled Warsaw Stock Exchange (WSE).
The National Bank of Poland (NBP) may be forced to issue its digital zloty to preserve the country’s monetary sovereignty, according to a recent analysis by Dietl.
While Poland is a European Union member, it’s not yet a member of the euro area, and zloty is not yet within the exchange rate mechanism. Per the European Commission website, “Poland does not have a target date to adopt the euro, but aims to do so as soon as possible.”
Dietl claims that if Poland does not in the foreseeable future join the euro area, which currently includes its fellow 19 European Union member states, the country should intensify its efforts to launch a CBDC “in a situation in which, in a few years, the architecture of the global financial system will be most likely determined by digital currencies: the dollar, euro and yen”.
“In this new model, the traditional fiat currency and the digital currency would function in parallel, and the [Polish] central bank would have full control over the base and monetary policy, it could not only defend the zloty, but also create conditions for its expansion,” Dietl said.
In the analysis, which was published by the country’s conservative think tank Jagiellonian Institute, the CEO builds on his earlier remarks made during a panel discussion in May.
“If we don’t introduce the digital zloty, then, whether we want it or not, we will find ourselves using the digital yuan, dollar or euro because it will be more comfortable to use and liquid,” he said.
The digital zloty could introduce a wide range of benefits to Polish consumers, democratizing their access to various segments of the financial market, Dietl argued, adding that “such a digital currency is inevitable, all the more because there will be increasingly efficient safety measures, although there also will be those who will want to override them”.
This said, the current leadership of Poland’s central bank has shown little enthusiasm for issuing a CBDC.
Marta Gajęcka, Member of the Management Board of the NBP, said during the same debate that bank was not working on the digital zloty project, but was observing such efforts by its peers across the region.
“Digital currency must be related with safe, reliable systems. Currently, there is no system in the world that would ensure 100% safety,” she said.