Christine Lagarde Favors Further Researching the Digital Euro

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For quite some time now, there have been talks about central bank digital currencies. One such venture seems to focus on creating a digital euro. Surprisingly, this concept has now received indirect support from Christine Lagarde. 

Will the Digital Euro Enter the Next Stage?

  • Despite the COVID-19 pandemic, the Euro has performed surprisingly well in 2020, especially when compared to the Euro.
  • Many governments and central banks see this pandemic as a good time to further explore central bank digital currencies. 
  • Until now, there was no real enthusiasm for a digital Euro, but the concept appears far from dead.
  • ECB President Christine Lagarde appears to favor such a digital Euro, even though the concept still carries plenty of potential risks. 
  • During a speech for Germany’s Bundesbank’s conference, she argued how the EU needs to keep developing digital payment methods.
  • Transitioning to digital payments has received an expected boost from the COVID-19 pandemic, as cash transactions are no longer accepted in most locations.
  • At the same time, Lagarde confirms digital payments are currently dominated by a handful of large players, which isn’t ideal. 
  • Introducing a digital euro will allow for innovation, but associated risks need to be examined thoroughly.
  • Over the coming weeks, the Eurosystem task force will share its findings on the viability of a digital Euro.
  • Switching to a CBDC will pose challenges for central bank money and banknotes in general.
  • Addressing those concerns will be crucial to determine the future success of this digital currency. 
  • For now, no official decisions regarding the CBDC have been made, but time is running out.
  • Bank of France governor Francois Villeroy de Galhai stresses how Europe cannot lag behind on digital currency research.
  • No details were provided on which infrastructure can be used for this CBDC. 

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