By Hassan Mehmood (Saudi Arabia)
The European Central Bank (ECB) has published a 50-page report which focuses on the need for digital euro for Europeans. The report addresses the major reasons behind the importance of digital currency for Europe.
Comprehensive Report on Digital Euro
The European Central Bank makes it clear that digital currency would complement cash instead of replacing it. Europeans should adopt the digital euro as the world is shifting to digital infrastructure. And the digital euro will be controlled by the European central banks. According to ECB, the digital currency “can either be centralised, with all transactions recorded in the central bank’s ledger, or feature some decentralisation of responsibilities to users and/or supervised intermediaries.” But the back-end system will be operated by the central bank.
“The euro belongs to Europeans and we are its guardian. We should be prepared to issue a digital euro, should the need arise,” ECB president Christina Lagarde said.
Europe Needs Digital Currency
ECB discusses major things that enforced them to think about digital euro. First, the need for digital electronic payments has increased many folds. Second, the use of cash has plunged even more as a result of Coronavirus. Third, central banks of other countries are also making great progress in launching a central bank digital currency (CBDC).
Also read:Lagarde has raised another point that Europe is adopting digital services. She added,” This means making sure the euro is fit for the digital age. We should be prepared to issue a digital euro, should the need arise.”
However, it is not yet decided that a digital currency would be launched or not. “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,” Fabio Panetta, chair of the CBDC’task force, stated.
The ECB is determined to launch digital euro that “would preserve the public good that the euro provides to citizens: free access to a simple, universally accepted, risk-free and trusted means of payment. It also poses challenges, but by following appropriate strategies in the design of the digital euro the Eurosystem can address these.”
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