“The digital euro could be released in the next two – four years”, said European Central Bank President Christine Lagarde. The digital euro will not replace cash. This will be an addition. Moreover, we are talking about retail CBDC, which intended for use by both companies and individuals.
However, she also noted that it will take a long time to develop a digital euro. Since it is necessary to develop not only the basic technology, but also measures to combat money laundering and prevent the financing of terrorism.
The European Union will not rush into the issue of a new type of currency
In an interview with Bloomberg Television, Christine Lagarde said that the ECB is already conducting research on the introduction of the digital euro, but the digital euro project may take several years of active research and development before it goes live. As an example, Lagarde cited the People’s Bank of China, which worked on the digital yuan for several years.
Also the development of the United States in this matter. So, while the US dollar is the world reserve currency, and the US government doesn’t consider the process of introducing the digital dollar, not only in positive but also in negative aspects, the decision on the need to introduce the digital dollar will not be made. Therefore, she believes that they should move with the digital euro in the same way. Until all the positive and negative aspects are investigated – not to hurry with its implementation.
Currently, in her opinion, the central banks of different countries are at different stages of the development of digital currencies. At the same time, the use of cash will continue, Lagarde assured.
More specifics about the digital euro
Earlier, the ECB launched a poll in which it invited EU citizens to express their position on the issue of the digital euro, since it is important to make the right decision.
The regulator has already prepared a report in which it considered the advantages and disadvantages of CBDC, and also registered the corresponding trademark.
The decision on whether to develop a digital, the Governing Council should take by the middle of this year.
The head of the ECB argues that such a long development associated with the fundamental consequences of the digital euro. Europeans, according to Lagarde, should feel the safety and security of their funds under the guise of digital currency.
The inevitability of digitalization
Lagarde announced the need for the emergence of a digital euro last year. The head of the ECB believes that the pandemic and tough quarantine measures have accelerated the digitalization of banking services. Nearly half of consumers said they prefer to pay digitally, and this increased even more during the pandemic.
It is noteworthy that first time Lagarde announced the launch of the digital euro back in November 2020. Then she also noted that the digital version of the euro has a right to exist. If it is faster, more reliable and cheaper for consumer.
Meanwhile, European regulators are gradually clearing the local market from potential competitors to the ECB’s digital currency. Earlier it became known that the regulator intends to obtain the right to veto the turnover of stablecoins. Thus, the regulator will be able to independently regulate large projects like Diem from Facebook.