Lagarde: “Digital Euro will be decided on within months”
The president of the European Central Bank, Christine Lagarde, stated that the release of a digital euro will take at least another four years.
A decision about digital Euro will be made in the next few months – however, the release of the currency can take years, ECB President Christine Lagarde stated today.
The ECB president said to Bloomberg that the whole process of developing a central bank digital currency (CBDC) can take at least another four years, although the Bank plans to make a decision on whether to move the initiative forward by “mid-2021.”
A CBDC is a digital version of a fiat currency that is backed by a central bank. Countries around the Earth are currently researching the benefits of developing such an asset.
“But the whole process—let’s be realistic about it—will in my view take another four years,” Lagarde declared. “Maybe a little more, but I would hope that we could keep it within four years because it’s a technical endeavor as well as a fundamental change.”
She added that the ECB could make a decision soon whether to actually release a CBDC, since the “mid- 2021″ target is only three months away. If the lawmakers give the go signal, work on the development of the technology will eventually start.
“We need to make sure that we do it right,” Lagarde continued. “We owe it to the Europeans. They need to feel safe and secure. They need to feel that they are holding a central bank-backed digital bank note.”
Lagarde said last year that a digital euro will be a good idea as it can complement cash and probably create new jobs.
However, her recent comments show that the central bank is behind the other major economies. For instance, China is now further ahead of the development: last October, the People’s Bank of China had settled over three million payments in digital yuan.
The ECB and US Federal Reserve seem to be treading even more cautiously. Last month, the Federal Reserve Chairman Jerome Powell stated that the US central bank wasn’t rushing a CBDC and was not “in the mode of making a decision at this point.”
Lagarde reiterated that the ECB will make a decision after analyzing responses from a public consultation on the matter.
“We need to make sure that we are not going to break any system but enhance a system,” she continued.
The ECB president since November 2019, Lagarde is not a fan of decentralized digital assets. Last January she stated that Bitcoin was “a highly speculative asset” involved in “money laundering activity” that must be regulated.
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