ECB President Says Digital Euro is Crucial for Payment Autonomy
The President of the European Central Bank, Christine Lagarde, has reiterated the importance of the digital euro in preserving the payment autonomy of Europe. The digital euro, which is still under development, is intended to be sovereign, safe, cheap, and widely available, Christine Lagarde assured during a discussion on central bank digital currencies.
BIS Virtual Panel on CBDCs
The
digital euro has a significant role in safeguarding the payment autonomy of
Europe, President of the European Central Bank (ECB) Christine Lagarde was
quoted as saying during a virtual panel on central bank digital currencies
(CBDCs), which was hosted by the Bank for International Settlements (BIS).
"When
you look at your wallet and your phone and see the applications you use for
payments or the cards you use for payments, you quickly realize that those
means of payment are not necessarily European," Lagarde said, according to
Bloomberg.
During
the discussion that was recorded earlier in March but posted on Tuesday, the
ECB chief warned against relying on a single source for critical aspects of
daily life, referring to the weaponization of energy supply by Russia following
its invasion of Ukraine and adding:
"So
we just have to be careful. Some people will call it sovereign autonomy;
I prefer to call it resilience.
Digital Euro Project
The
project to issue a digital version of the euro is still in its investigation phase, which
started in mid-2021. In December 2022, the ECB released a
second report on the
advances made during the period, and in January 2023, the finance ministers of
the Eurozone countries pledged support for the
initiative.
In
November 2022, Lagarde announced that Brussels will present the draft
legislation for the CBDC. The European Commission is expected to propose the
legal framework by the end of June, while the final decision on the project is
likely later this year.
Christine
Lagarde highlighted the trend of increasing digital payments while decreasing
the use of cash. She pointed out that the digital euro is intended to be safe,
sovereign, and available "at the cheapest possible cost."
However,
she also admitted that it would not provide the same privacy as paper
banknotes. "A digital currency will never be as anonymous as cash,"
she acknowledged, adding that this is why "cash will always be
around."
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