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In the letter
- ECB President Christine Lagarde said today that the decision on whether or not to release a digital euro will be made by the middle of this year.
- But the actual release of a digital currency from the European Central Bank will take years, she added.
A decision on a digital euro will be taken in the coming months, but the effective release of such a currency could take years, Said today the boss of the European Central Bank, Chirstine Lagarde.
The President of the ECB Told Bloomberg that the entire process of developing a central bank digital currency (CBDC) could take at least an additional four years, although the Bank plans to make a decision on whether to move on to the initiative by now ” mid-2021 ”.
A CBDC is a digital version of a fiat currency (in this case, the euro) that is backed by a central bank. Countries around the world are currently look for the benefits to develop such an asset.
“But the whole process – let’s be realistic about this – will take another four years in my opinion,” Lagarde said. “Maybe a little more, but hopefully we can keep it within four years because it’s a technical undertaking and a fundamental change.”
She said the ECB would soon make a decision on whether to actually release a CBDC. After all, that “mid-2021” goal is only three months away. If lawmakers give the green light, then work on developing the technology will begin.
“We have to make sure we’re doing it right,” Lagarde added. “We owe it to the Europeans. They need to feel safe. They need to feel like they are holding a central bank-backed digital banknote. “
Lagarde last year said that a digital euro would be a good idea because it could supplement liquidity and possibly create new jobs.
But his comments today show that the central bank is behind other major economies. China, for example, is well ahead: in October, the People’s Bank of China installed more than three million digital yuan payments.
The ECB and the US Federal Reserve appear to be more cautious. Last month Federal Reserve Chairman Jerome Powell said that the US central bank was not rushing a CBDC and was not “making a decision at this stage”.
Lagarde reiterated today that the ECB will make the decision after analyzing the responses of a public consultation About that.
“We have to make sure that we are not going to break any system but improve a system,” she added.
Lagarde, who became president of the ECB in November 2019, is not a fan of decentralized digital assets. In January, she said this Bitcoin was “a highly speculative asset” involved in “money laundering activity” which must be regulated.
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