ECB sees digital euro centralized with decentralized characteristics
The European Central Bank today released a major report on the digital euro. According to the regulator, Europe should be ready to issue its digital currency if the need arises.
The authors of the document confirmed earlier reports that digital currency will not completely replace cash. They also note that no specific decisions on this matter have yet been made..
The ECB has identified four scenarios in which a digital euro can be issued: increased demand for electronic payments, a significant drop in the demand for cash, the launch of private digital currencies, and the massive digital issuance of national currencies by other central banks..
ECB President Christine Lagarde noted that Europeans are increasingly using digital settlement methods for spending, saving and investing. “This means we need to make sure the euro is fit for the digital age. We must be ready to issue a digital euro if the need arises, ”she said.
The digital euro in the ECB means the electronic form of central bank money, available to all legal entities and individuals, which will improve the experience of payment interaction.
The authors admit that the digital currency can be either “centralized, where all transactions will be recorded in the central bank register, or have some characteristics of decentralizing the responsibility of users and / or controlled intermediaries.” In any case, the underlying infrastructure should be administered by the central bank, the document says..
“The digital euro will preserve the public goods that the euro provides to citizens: free access to a simple, widely accepted, risk-free and trusted means of payment. It also presents challenges, but developing appropriate strategies in the Eurosystem will help to respond to them, ”says the ECB..
The collection of public comments on the report will start on 12 October. In parallel, experiments will begin “without prejudice regarding the final solution”.
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