Christine Lagarde, the president of the European Central Bank (ECB) has stated the bank will be making a decision on launching a digital Euro at the beginning of 2021. On November 12 in an online strategy panel, the president said that the bank isn’t “racing to be first” in its attempt to launch a central bank digital currency (CBDC).
Though the bank’s president stated that the outcome of the consultation on digital Euro organized by the bank in October will be finished in January 2021.
“At that point in time we will make the decision as to whether or not we go forward with the digital Euro. My hunch — but this is a decision that will be taken collectively — is that we might well go in that direction.”Christine Lagarde, President, European Central Bank
ECB still in a fix regarding CBDCs, and not just the Digital Euro
The European Central Bank however still has to tackle issues when it comes to forming an ultimate decision on central bank digital currencies (CBDCs), according to the ECB president. Just recently, the UK announced that it planned to explore and regulate stablecoins and CBDCs.
She specifically states that along with user privacy the bank would take into consideration funding of terrorism acts and anti-money laundering.
Moreover, the bank’s president stated China’s newly digital yuan testing and Facebook’s Libra token as instances of why the central bank shouldn’t launch in a hurry and conveyed an estimate of the schedule if the bank plans to move forward: “This is a project that will probably take us two, three, four years before it is launched.”
Andrew Bailey, Bank of England Governor, and Jerome Powell, Federal Reserve Chair were speakers on the panel too. Powell ingeminated his stand on CBDC and said that “it was critical that we get it right as opposed to trying to be the first.” The Bank of England Governor suggested to the panel that individuals are entitled to “expect certainty of value” in any currency.
Since Lagarde took up the role of head of the International Monetary Fund, she has time after time emphasized her support for a digital Euro. However, there hasn’t been any official decision from the bank. Lately, the bank has started a public consultation to receive feedback from customers to know what is expected from a digital Euro.