ECB warns of ‘stability risks’ if central banks do not offer digital currencies

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The European Central Bank (ECB) has published a report on the international role of the euro on Wednesday, discussing the importance of central bank digital currencies (CBDCs) for future financial strength.

The authors of the CBDC part of the report were economists Massimo Ferrari and international economist Arnaud Mehl, both affiliated to the ECB.

They said “attention should be paid to the stability risks that could arise if a central bank does not offer digital currency”, adding that “issuing a CBDC would help maintain the autonomy of the systems of national payments and international use of a currency in a digital world. “

The ECB, and in particular its president Christine Lagarde, was receptive towards the idea of ​​the digital euro as a complaint to physical money – even if it is opposed to bitcoins and other digital assets like stable coins. that of Lagarde previous comments regarding the digital euro had been vague and lukewarm at best, shaped by the need for more research and testing.

While the ECB is still in the process of determining the Infrastructure behind the digital euro, these comments from the ECB report seem to be the most positive and optimistic about the broad benefits of implementing a CBDC to date.

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