The president of the European Central Bank (ECB) states that the digital euro should complement cash instead of replacing it. Christine Lagarde suggests digital currency should aid traditional cash rather than replacing it.
Lagarde’s Speech at Assembly
ECB president Christine Lagarde speaks in favor of digital currency and its importance at the Franco-German Parliamentary Assembly. Lagarde said, “we are also exploring the benefits, risks and operational challenges of introducing a digital euro.” Digital currency could be a better alternative to private digital currencies but not to cash. She stated:
“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.”
Benefits and Concerns of Digital Currency
ECB president explains that Europe should take benefit of the digital technology for financial infrastructure while keeping eyes on challenges and concerns related to it. “At European level, this should be complemented by accelerating progress towards the Digital Single Market to help deliver economies of scale for digital firms, while addressing key concerns around cybersecurity and data protection,” she said.
The European Central Bank published a comprehensive report on digital currency in November. The report was later publicized for feedback. Recently, Largarde said that a consultation would be held to discuss the issuance of digital currency.
The central bank of France asked Societe Generale Forge to develop a central bank digital currency (CBDC) for interbank settlements. Societe Generale Forge announced on September 15 that Tezos will be employed for CBDC trials.
In a race to issue state digital currency, China has a leading position as it is close to becoming the first-ever country to issue a CBDC. According to an article published by PBOC magazine China Finance:
“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track.”