Lagarde highlighted that the digital euro will be a complement to cash and not a substitute. The US Federal Reserve is also considering the creation of a digital dollar.
There is already a tentative launch date for the digital version of the euro, but it is not as early as expected. The president of the European Central Bank (ECB), Christine Lagarde, said that the currency could begin to circulate within about 2 to 4 years when the preparations for its launch are complete.
Lagarde stresses that the development of the digital euro “will take time”. The authorities will not only have to address the development of the technology underlying the currency, which could be a blockchain. They will also have to determine the controls of money laundering and prevention of terrorist financing to which this new euro will be subject.
Despite the wait, the ECB president says that she “has a hunch” that the digital euro will arrive. The authorities are very interested in the facilities that this currency could generate regarding cross-border payments. “We should explore it,” Lagarde noted.
Christine Lagarde also stressed that she does not believe that the digital euro will replace cash. On the contrary, she stated that the new format of the official fiat currency of Europe will only be a complement to payments with euro notes and coins.
Central Bank Digital Currencies Remain in Sight
Lagarde recently participated at a virtual forum on central banks, which included the president of the Central Bank of England, Andrew Bailey, and the president of the US Federal Reserve, Jerome Powell.
These personalities expressed the views of their nations regarding the creation of a central bank digital currency (CBDC). For example, Powell reconfirmed that the US authorities are still considering the possibility of issuing a digital dollar.
Even though they are discussing this possibility, Jerome Powell stressed that they have not made a decision yet, so it is not certain that the United States will have its cryptocurrency. This view is consistent with statements by other US authorities, such as the Comptroller of the Currency, who considers that the Central Bank does not need to be in charge of issuing more forms of payment.
On his part, Andrew Bailey states that the authorities in England are more concerned about the impact of stablecoins on the financial security of their citizens. He considers that there are legitimate concerns regarding the privacy of these corporate-issued coins, which they should address to prevent their customers’ exposure.
According to Bailey, the Central Bank of England could focus on creating its digital pound, thus unifying the issuance of this currency and avoiding conflicts of interest. In recent days, a member of the English Parliament said that they are preparing for the creation of their cryptocurrency.
Meanwhile, China continues to lead the way to create a digital currency. The Asian country has spent several years developing this payment method and has begun to conduct tests among its population. Despite its early launch, some citizens of China are doubtful about the success of the use of this new currency daily.
By Alexander Salazar