Central banks have been speeding towards the launch of a digital currency. The ECB has also been steering towards the same. With China and several other countries ahead of the CBDC game, the pressure on certain countries has surged. ECB, however, isn’t trying to get on top of the game.
ECB To Explore Prospects Of Digital Currency
In the recent European Central Bank [ECB] Forum on Central Banking 2020, the President of the ECB, Christine Lagarde addressed the development of central bank digital currencies [CBDC]. While she assured that the platform is keen on developing a digital currency, she pointed out that the bank is not “racing to be first.” Lagarde had a “hunch” that the European digital currency would make its way into the financial market.
While the COVID-19 pandemic put the world in shackles further unveiling the need for digitalization, several countries commenced probing and developing digital currencies post the pandemic. However, the concept of incorporating a digital currency into the existing system came to light following the need for elevated monetary sovereignty. She added,
“It’s not a nicety, it’s not a tantrum, it is something that if it’s cheaper, faster, more secure for the users then we should explore it. If it’s going to contribute to a better monetary sovereignty, a better autonomy for the euro area, I think we should explore it. If it is going to facilitate cross border payments, which are very laborious in quite a few corners of our big world, then we should explore it.”
Just last month, the ECB revealed that it would be “intensifying” its endeavors in the development of the European digital currency. While the EU recently denounced the efforts of other private sectors to launch a stablecoin, it asserted that the issuance of a stablecoin should be limited to the ECB only.
Elaborating on the development and issuance of the digital euro, the President revealed that the currency would not be available right away. She suggested that the CBDC could take about two to four years to enter the global financial scene.