The European Central bank “should be prepared” to launch a digital currency, president Christine Lagarde said Friday, adding that the public will be asked to weigh in on the issue. The central bank will carry out a series of experiments with a digital euro over the next six months and launch a three-month public consultation from October 12. The ECB said a decision on whether to move ahead with a virtual currency project is expected around mid-2021.
The ECB asks the public to weigh in on the digital euro.
The ECB president said that their role is to secure trust in money. “We should be prepared to issue a digital euro, should the need arise,” she added. The digital euro would “complement cash, not replace it,” she added. The move comes as consumers increasingly pivot toward cashless payments. The ECB is wary of falling behind so-called cryptocurrencies issued by private players like Bitcoin and Facebook’s yet-to-be-launched Libra. A digital currency would allow individuals as well as companies to have deposits directly with a central bank, potentially safer than with commercial banks.
China is all set to become the first major nation to issue a CBDC.
The ECB’s deliberations on a CBDC echo those of the US Federal Reserve, which has been researching a digital dollar. The People’s Bank of China has been working on its digital currency for the last five to six years and is now close to issuing it to the general public. China would be the first major nation in the world to issue a central bank-backed digital currency. As reported earlier, the Bank for International Standards revealed that CBDC was more searched than bitcoin and Libra this year. Central banks across countries have expressed interest in CBDCs, and many of them are working actively on the same.