Christine Lagarde, the president of the European Central Bank, said that innovation in the area of payments is racing ahead in response to the urgent demand for quicker and cheaper payments, especially cross-border ones. She noted that ECB wants to play an active role in this field rather than just act as an observer of the changing world.
ECB will continue to assess the cost and benefits of issuing a CBDC.
The President of the European Central Bank mentioned that in terms of the road ahead, they would continue to assess the costs and benefits of issuing a central bank digital currency (CBDC) that would ensure that the general public remains able to use central bank money even if the use of physical cash eventually declines.
ECB does not want private companies to get discouraged by the central bank’s initiative.
Christine Lagarde said that the prospect of central bank initiatives should neither discourage nor crowd out private market-led solutions for fast and efficient retail payments in the euro area. Lagarde, who previously served at International Monetary Fund, is known for her positive stance on innovative technologies in the financial world. She also remarked that they are looking closely into the feasibility and merits of a CBDC, also because it could have significant implications for the financial sector and for the transmission of monetary policy, she added.