The European Central Bank said today that Europe should get ready for the launch of a digital euro to complement its cash. The ECB is clear that the digital offering should not replace cash but only be used to compliment it.
Focusing on digitization
The European Central Bank (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 as the digital euro report was published. 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.
Christina Lagarde, the president of ECB commented on the plan and said,
“The euro belongs to Europeans and we are its guardian. We should be prepared to issue a digital euro, should the need arise.”
Executive Board member of the ECB, Fabio Panetta said that digitization is impacts societies rapidly and the way people pay is changing. He said that practices are also evolving.
Public consultation begins next week
The ECB report provided the assessment of technological, social, economic, and strategic choices that should be taken into account for the creation of the digital euro. It will become the foundation of an upcoming public consultation which begins 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 the digital euro will only be issued by the central bank and remain its liability at all times.