The European Central Bank (ECB) is currently looking into a digital euro issuance while also evaluating how it would benefit its financial system.
October 5, 2020 | AtoZ Markets – The ECB said Monday that Europe should get ready for the launch of a digital euro to complement its cash. According to the ECB, a digital euro should complement but not replace cash.
Launching a digital euro in response to the growing digitization
The ECB said that it must prepare for launching a digital euro in response to the growing digitization in all areas of life. The announcement comes right after the ECB published the digital euro report. The report defines the reasons to issue a digital euro, the effects of this on the continent. It also lays down the legal consequences of a digital euro. This suggests a growing tolerance for digitization and the ECB’s efforts to ensure that the Euro doesn’t get left behind.
Commenting on the plan ahead, the ECB president, Christina Lagarde said:
“The euro belongs to Europeans and we are its guardian. We should be prepared to issue a digital euro, should the need arise.”
Fabio Panetta, an executive board member of the ECB, said:
“Whether or not we need a digital euro is a fundamental and pressing question, and the ECB and the national central banks of the euro area are considering it together.”
ECB public consultation on a digital euro begins next week
As AtoZ Markets reported, the ECB will start experimenting with a digital version of the euro while holding a public consultation beginning on October 12.
The ECB intends for the euro to become resistant to cyber-attacks and provide efficiency to the users. The system should be able to provide a safe system that is immune to cyberattacks. The digital euro must also be at par with the state-of-the-art technology at all times to address the needs of the market in the best way possible.
The report clearly mentions that the digital euro will not be a stablecoin or a crypto asset. It will be risk-free central bank money. This means that it is only the central bank that would issue the digital euro and remain its liability at all times.
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