ECB: Digital Euro Should Complement, Not Replace Cash

The president of the ECB, Christine Lagarde has said that she expects a digital Euro to complement fiat currency, not replace it.

September 22, 2020 | AtoZ Markets – The President of the European Central Bank (ECB), Christine Lagarde, spoke at a conference before the Franco-German Parliamentary Assembly about the introduction of the digital euro. Lagarde said she expects the digital euro to be an asset that would not replace fiat money, but rather serve as a supplement.

“We are also exploring the benefits, risks and operational challenges of introducing a digital euro,” Lagarde said, in her speech, adding, “A digital euro could be a complement to, not a substitute for, cash. It could provide an alternative to private digital currencies and ensure that sovereign money remains at the core of European payment systems.”

Read also: ECB President Is Bullish on a European Central Bank Digital Currency

EU has not reached a consensus on digital euro introduction

On September 10, during an online conference with the Deutsche Bundesbank, President Lagarde said that consumer preferences have seen an increase in digital contactless payments, with Europeans taking to online platforms for their retail needs during the pandemic.

With the digital revolution at our footsteps, “more than four in five Europeans regularly use the internet, up from one in five two decades ago,” said Lagarde. Global payments have been increasingly on the surge, as the pandemic has driven the digitization trend forward.

The ECB President also said that the European Union has mot made a decision as to the introduction of a digital euro. However, she said a task force to study the risks and potential effects of a CBDC would be announced this month.

Read also: European Union to Provide Clear Crypto Regulation in 2024

Euro money printer goes brrr

Despite a strong euro, the ECB recently announced it would not alter its interest rates and COVID-19 stimulus programs. This, according to the Bitcoin billionaire Tyler Winklevoss is a “powerful advertisement for Bitcoin.”

The ECB stimulus money printing and interest-free lending to businesses appear set to continue as it announced it would not be making any immediate changes to raise inflation or to alter its Pandemic relief program which remains at a total of 1.35 trillion euros.

Tyler Winklevoss, however, criticized the ECB’s announcement—to continue to keep refinancing operations, marginal lending facility, and the deposit facility unchanged at 0.00%, 0.25%, and -0.50%, respectively.

Winklevoss said:

The European Central Bank’s refinancing rate is 0% and its deposit rate is -.5%. This means it is free to borrow money, but actually costs you money to save. Thinking face This is both a potent recipe for inflation and powerful advertisement for #Bitcoin.

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