The European Central Bank could have its own cryptocurrency within four years. President Christine Lagarde says the institute could have a ‘digital euro’ ready by then if the European Parliament, among others, approves this this summer.
ECB President Lagarde says after 22 minutes in an interview with Bloomberg that there is currently no certainty whether a European crypto currency will be implemented. The European Central Bank opened a consultation for its own crypto currency in January. This is a centralized ‘digital euro’ that stakeholders were allowed to give their opinion on. According to Lagarde, more than 8,000 responses have been received. Based on this, however, it is not yet possible to say whether a digital euro will be launched.
In the coming months, first the European Parliament and then the Governing Council of the ECB must make a statement on whether the experiment will go ahead. That decision will probably be made by the middle of this year. After that, it will take a long time before the coin would actually be there, says Lagarde. “Let’s be realistic, that will take at least four years. It is a difficult technical issue and a fundamental change in how we handle money now. We owe it to Europeans to do it carefully. Users should feel safe with it .”
Little is known at the moment about what a ‘digital euro’ will look like. It is a cryptocurrency that most likely works with a blockchain, but the ECB previously said that due to the volatility of the price of current cryptocurrencies, the digital euro must be regulated centrally. Several other countries, including China, are already experimenting with a digital national currency. There is only one country that actually uses such a currency: the Bahamas. Lagarde says he doesn’t know enough about this to say that cryptocurrencies are a good idea for governments.
According to Lagarde, a digital currency is a logical step forward. “If you look at people’s behavior during the corona crisis, how they buy things, that is increasingly going digital and we have to respond to that.” At the same time, Lagarde emphasizes that cash must always exist. Also, a cryptocurrency “shouldn’t be a replacement for digital bank accounts, but an improvement on them.”