European Central Bank (ECB) President Christine Lagarde said in a Bloomberg interview that the organization could be looking to launch a central bank digital currency within four years.
- Christine Lagarde says that the ECB has yet to make a decision on whether they will go ahead with the creation of a digital Euro.
- The ECB plans to make a decision on a new digital currency sometime in 2021.
- Lagarde noted that making such a new currency could take another four years.
- Some ECB members recently expressed concerns about currencies made by third parties such as tech giants and how they could threaten the stability of the financial system should they get widespread usage.
“We need to make sure that we do it right – we owe it to the Europeans. The whole process – let’s be realistic about it – will in my view take another four years, maybe a little more,” Lagarde said regarding a digital Euro.
Lagarde continued: "There is a governing council that brings together all the national central bank governors as well as members of the executive board. The decision as to whether or not will move with a digital Euro will be taken by that organ."
On March 25, the ECB released a blog post from Member of the Executive Board, Fabio Panetta, and ECB Director of Market Infrastructure and Payments, Ulrich Bindseil, which gave further insight into the ECB's sentiment toward a digital Euro.
In the post, they state that "it is not yet decided whether a digital euro will be introduced at all. We are still exploring the possibility and considering it conceptually. Later this year, the ECB’s Governing Council will decide whether or not we should launch a project to get ready to issue a digital euro."
While it is clear that the decision on a central bank digital currency is not an immediate priority, Panetta and Bindseil did share some concerns regarding external payments providers and artificial currencies created by third parties.
The blog expressed these concerns by concluding:
"We must avoid a situation in which European payments are dominated by non-European providers, including by foreign tech giants potentially offering artificial currencies in the future. Not only could this threaten the stability of the financial system, but individuals and merchants alike would be vulnerable to a small number of dominant providers with strong market power."