- ECB announces public consultation on digital euro.
- The digital euro will be equivalent to euro banknotes.
- ECB is looking into the possibility of issuing its own central bank digital currency (CBDC).
The European Central Bank (ECB) has launched a public consultation on the digital euro. Consumers and Europeans can express their preferences on whether they would be happy to use the digital currency.
We’ve started exploring the possibility of launching a digital euro. As Europeans are increasingly turning to digital in the ways they spend, save and invest, we should be prepared to issue a digital euro, if needed. I’m also keen to hear your views on it https://t.co/0ZuU2ZZgCp pic.twitter.com/CoY5sN7Yoz
— Christine Lagarde (@Lagarde) November 1, 2020
ECB’s Governing Council decided to advance work on the possible issuance of a digital euro for the digital era. In line with this, public consultation survey participants must register first.
European Central Bank President Christine Lagarde expressed that:
As Europeans are increasingly turning to digital in the ways they spend, save, and invest, we should be prepared to issue a digital euro if needed.
A digital euro would not replace cash, but complement it, says the European Central Bank. Moreover, ECB believes that acceptance by the public is crucial. For this reason, they launched a public consultation wherein everyone can participate.
Executive Board member Fabio Panetta says that,
We welcome everyone’s views: citizens, merchants, the non-financial sector, professionals from the financial industry, technology companies, and academics.
The Digital Euro
The digital euro will be issued by the Central Bank. To begin with, people can use it for daily transactions such as e-commerce. More so, it would be an electronic form of central bank money accessible to all citizens and firms.
In other words, it is a digital equivalent of euro banknotes. The digital asset will provide costless access to a simple, risk-free, and trusted digital means of payment. Also, it is designed to be easy to understand, easy to use, and easy to transfer. Most importantly, a digital euro would increase privacy in digital payments.
ECB to Issue Its Own Central Bank Digital Currency
Lagarde has also expressed that ECB is looking into the possibility of issuing its own central bank digital currency. The issuance of a CBDC could help manage the impact of extreme events such as natural disasters or pandemics. Another key benefit of a future CBDC would be providing the Eurozone with strategic autonomy.
Earlier this year, Largade expressed that:
We are looking into the feasibility and merits of a central bank digital currency. It would ensure that people can continue to use central bank money even if the use of physical cash eventually declines.