European Central Bank (ECB) President Christine Lagarde said a decision on the introduction of a CBDC will be made by the middle of this year.
However, after the decision on whether or not to conduct a digital euro issue, the actual development of the central bank’s digital currency (CBDC) will take at least four years, the central bank’s president said. Speaking to Bloomberg, Lagarde said:
“But the whole process – let’s be realistic – will, in my opinion, take another four years. Maybe a little more, but I would hope we can keep it within four years as it is both a technical endeavor and a major change. “
Lagarde claimed that a decision on whether to continue a CBDC issuance will be completed by “mid-2021”. She said:
“We have to make sure we’re getting it right. We owe it to the Europeans. You need to feel safe and secure. You must feel like you have a central bank supported digital banknote. “
Previously, Lagarde said a digital euro would complement cash rather than act as a replacement. Consumer preferences have led to an increase in digital contactless payments, with Europeans using online platforms for their retail needs during the pandemic. The European Central Bank has therefore examined a potential issue of CBDC in order to remain competitive in the digital wave.
With the digital revolution in our footsteps, “more than four in five Europeans use the internet regularly, up from one in five two decades ago,” said Lagarde. Global payments are increasingly on the rise as the pandemic drove the digitization trend forward.
CBDCs in major economies
Despite discussing the possible issuance of a digital euro, Lagarde has been more cautious with CBDCs, much like the US Federal Reserve. Fed reserve chairman Jerome Powell had previously said the bank would not cut back on studying the digital dollar. He claimed that the goal is not to be the first to use one central bank digital currency – Rather, it should be issued in the correct manner, by thoroughly researching the CBDCs before proceeding with any publication.
China has taken a different approach. The People’s Bank of China had already started to carry out its pilot projects last year electronic payment in digital currency (DCEP) in major cities in China. In addition, a $ 1.5 million digital yuen giveaway was held in Shenzhen City.
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