Digital Euro Could Be a Complement to, But Not a Substitute For Cash
September 22, 2020 2:30 pm
According to the President of the European Central Bank, Christine Lagarde, any of the Digital currencies released in the European Union may not fully replace fiat.
In an online meeting of the Franco-German Parliamentary Assembly on September 21, Christine Lagarde affirmed that the bank was exploring “the benefits, risks and operational challenges” of a European Central Bank Digital Currency (CBDC), but fiat currency would likely still play a role in this digital future.
“A digital euro could be a complement to, not a substitute for, cash. It could provide an alternative to private digital currencies and ensure that sovereign money remains at the core of European payment systems.”-Christine Lagarde, the President of the European Central Bank.
On September 10, the president of European Central Bank president said the Eurosystem had not yet decided on whether to introduce a digital euro although stated that a task force to study the potential effects of a CBDC on Europe would be announced: “in the coming weeks.”
Christine Lagarde has long supported the central bank developing a digital euro to address the move towards digitalization. Last September, when Lagarde was the head of the International Monetary Fund (IMF), the ECB president said she would focus on assuring EU institutions adapt to the changing financial environment by being open to crypto.
However, Lagarde highlighted that the European economy was facing an “unprecedented crisis” with the current pandemic. The ECB president said the recovery was “uneven and incomplete” and would all be dependent on how well the virus could be contained.
Lagarde concluded that the challenge in front of us is not only to build “bridges” between European countries, we also need to build bridges to the future and shape a recovery that makes our economies fit for the future.