ECB calls the condition for the success of the digital euro
According to representatives of the bank, the asset should be widely accepted by Europeans and become part of their daily lives
14.07.2022 - 15:45
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What’s new? The European Central Bank (ECB) has named a condition for the success of the digital euro. According to the regulator's blog, the currency must first gain wide acceptance among European users and become part of their daily lives, which will increase its value “compared with existing solutions.” Also, the ECB President Christine Lagarde and Executive Board member Fabio Panetta noted that the digital euro is meant to be used as a means of payment, not as an investment.
What does the blog say? Lagarde and Panetta explained that if the asset is used for investment, users will transfer deposits en masse from commercial banks to the ECB, making it difficult for private financial institutions to lend to consumers and could put pressure on the banking system in a situation of financial instability.
The officials also presented arguments in favor of the digital euro:
“Introducing a digital euro would ensure that citizens can continue to trust in the monetary anchor behind their digital payments. It would protect the strategic autonomy of European payments and monetary sovereignty, providing a fall-back solution if geopolitical tensions intensify.”
The specifics of the design of the digital euro are still unknown. Lagarde and Panetta noted that it is too early to discuss the specifics of the project. At the same time, the research phase is expected to be completed in the fall of 2023. And the release of the asset could take place as early as 2026.
Earlier, Lagarde said that cryptocurrencies are unsecured and should be regulated to protect investors from speculation. She also contrasted cryptocurrencies with the digital euro.
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