Faced with challenges on many fronts, the European Central Bank is now deepening the analysis of how to digitalize its currency. A decision on whether to issue a digital euro, which has the potential to become a major CBDC, is expected around mid-2021, a high-ranking official of the central bank has confirmed.
Eurozone’s Central Bank to Decide on the Digital Euro Project Within Months
Occupied with planning a “cautious exit” from the social, economic and health emergency forced upon the European Union by the Covid-19 crisis, the ECB is also compelled to think about a digital version of the euro, the fiat currency of Europe’s monetary union. The U.S. Federal Reserve is preparing to present prototypes of a digital dollar in July, Facebook-backed, dollar-pegged diem is set to launch this year, and China has already offered its citizens to apply for a digital yuan wallet.
On this backdrop, the central bank of the Eurozone is now increasing efforts to thoroughly examine the option to issue its own digital currency, ECB Vice President Luis de Guindos revealed to the press. He also confirmed that the bank’s Governing Council will decide around mid-2021 whether to initiate a project for the launch of a digital euro. Speaking to the Italian daily La Repubblica, the official stated:
Our current focus is to deepen the analysis of how a digital euro should work and what it should look like to benefit European citizens and our economy.
According to the English translation of the recent interview published by the ECB this week, de Guindos also noted that central banks have played a key role worldwide in dealing with the coronavirus pandemic, “and we must make sure we are also well equipped to deal with any future challenge, on all fronts.”
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