ECB steps up work on digital euro

The European Central Bank (ECB) published a comprehensive report on a possible launch of the digital euro, prepared by the Target Group [simple_tooltip content=”the monetary and credit authority of the euro area, comprising the ECB and the national central banks”]Eurosystem[/simple_tooltip] on CBDC. The regulator also stated that consultations and experiments would begin soon.

The ECB sees the digital euro as an electronic form of central-bank digital currency designed to enable payments that are fast, simple and secure.

As previously noted by ECB President Christine Lagarde, CBDC will not replace cash but complement it. The Eurosystem, in any case, will continue to issue banknotes.

“Our role is to ensure trust in money. That means the euro must keep pace with the era of digital technologies. We must be ready to issue a digital euro if necessary,” Lagarde said.

The Eurosystem Target Group, composed of experts from the ECB and 19 euro-area national central banks, laid out potential scenarios that would warrant CBDC issuance:

• increased demand for electronic payments in the euro area;
• significant reduction in the use of cash as a means of payment;
• launch of global private currencies for use in payments;
• wide use of CBDCs issued by foreign central banks.

From 12 October, the Eurosystem will open a public discussion on the needs, benefits and issues associated with CBDC issuance.

“The launch of the digital euro would support Europe’s drive for enduring innovation. It would also bolster its financial sovereignty and strengthen the euro’s international role,” said the chair of the Target Group, a member of the ECB’s Governing Council, Fabio Panetta.

Earlier the ECB’s lawyers submitted an application to register the trademark “digital euro.”

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