Speaking at an online meeting of the Franco-German Parliamentary Assembly, ECB President stated that the bank was exploring “the benefits, risks and operational challenges” of a European central bank digital currency (CBDC), but fiat currency would likely still play a role in this digital future. Earlier, the ECB president said that the Eurosystem had not yet decided on whether to introduce a digital euro, but said that a task force to study the potential effects of a CBDC on Europe would be announced “in the coming weeks.”
“A digital euro could be a complement to, not a substitute for cash.”
The President of the European Central Bank, Christine Lagarde, said that a digital euro could complement not a substitute for cash. The ECB President has long supported the central bank in developing a digital euro to address digitalization. Last September, when she was the head of the International Monetary Fund, the ECB president said she would focus on ensuring EU institutions adapt to the changing financial environment by being open to crypto. Several European countries have voiced positive opinions on digital currencies.
China to become the first major nation to launch a CBDC.
The People’s Bank of China has been working on its central bank digital currency for the last five to six years and is now very close to issuing it to the general public. Several economists and crypto experts have claimed that digital yuan could threaten the US dollar’s global dominance. Countries like Canada, the USA, and many other developed countries are currently exploring CBDCs. The Bank for International Settlements had released a report earlier revealing that CBDC was searched more than bitcoin and Facebook’s Libra this year. The ongoing pandemic has exemplified the need for CBDC worldwide.