The ECB has applied to trademark the term “digital euro” for a move that demonstrated its enthusiasm for the central bank digital currency (CBDC).The ECB has applied for the trademark on September 22, as of now, the ECB has currently prepared for a report to be released in CBDC.
When the ECB released the report, it will detail the advantages and disadvantages of making a CBDC retail across Europe; the ECB will consult the public in a questionnaire. The public will then have a feedback on the findings and the shape the future CBDC policy.
Countries worldwide are now working on research into CBDCs – the digitized versions of native fiat currencies, like the euro, US Dollar, or even the Japanese yen.
In the ECB situation, the euro will become digitized in the hope that it will make the transactions smoother, minimize the cash use, and help the banks lower the interest rates.
Christine Lagarde, the ECB President, had talked about CBDC for the past few years. In the year 2018, before she became the president, she was already considering the possibility of digital currency in Europe.
Despite the central banks worldwide exploring the possibilities of the CBDCs, one is yet to be released.
China is significantly ahead of the game, and it is already testing a digital yuan. While Western Europe and the US are still cautiously researching the idea of such currency.
A CBDC will be very different from a cryptocurrency like Bitcoin or Ethereum because it will be centralized and controlled by one society-central bank. The critics of central bank digital currencies have said that the privacy considerations must be taken into account, as CBDCs can offer all the traceability of the cryptocurrencies without the anonymity of the cash.