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European Central Bank Wants to Develop Digital Currency

Reporting from CoinDesk, Head of the European Central Bank (ECB), Christine Lagarde, in an interview on Wednesday (1/8/2020) with the French business magazine, Challenges, stressed the ECB wants to play an active role in cryptocurrencies. As businesses and individuals make more payments across countries all the time, Lagarde said the bank will continue to look for the feasibility and benefits of digital currencies issued by the central bank or Central Bank Digital Currency. “

Lagarde added that the bank does not want to obstruct the cryptocurrency made outside its scope. “The prospect of a central bank initiative should not prevent or get rid of private market-led solutions for fast and efficient retail payments in the European region,” he said.

“CBDC may have significant implications for the European bloc’s financial sector and future changes in monetary policy,” Lagarde said.

The ECB formed a crypto currency task force last month that will work with the central banks of the European zone countries to understand the benefits and costs of possible CBDCs in the Eurozone.

Global interest in CBDC came soon after the opening of Libra Facebook in the summer. Although the People’s Bank of China (PBOC) has been preparing “digital yuan” for years, officials only began to leak information about it at the end of last summer. There are reports that reveal that private initiatives can take market share before a government currency is launched.

Most central banks describe the relationship between crypto, CBDC and fiat currencies as exclusive and hostile. Bank of England Governor Mark Carney said last year that the multi-fiat-supported CBDC could replace the US dollar as the dominant global reserve currency.

Although Lagarde said that crypto currencies can overcome many problems, he said that crypto currencies might also present new risks for users. Last month, he expressed his concern that Facebook could use its digital platform to lock down rival operators and thus gain an unfair advantage.

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