According to ECB president Christine Lagarde, Europe can resist the advance of foreign groups in European payments with a digital euro. “By shaping public digital money, we can stay ahead of these developments,” Lagarde said Monday in a video message to a conference of the European Central Bank (ECB) and the European Commission. In this way, confidence in the money system can be safeguarded and innovations can be promoted. This would strengthen Europe’s strategic autonomy.
In her speech, Lagarde warned of an increasing role for large foreign technology groups in payments in Europe. This entails the risk of market dominance and the risk of dependence on foreign technology. “Today, more than two-thirds of card payment transactions in Europe are carried out by companies headquartered outside the European Union,” said the head of the ECB.
Central banks around the world are now exploring the introduction of digital versions of their currencies. The currency watchdogs are responding, among other things, to the threat of competition from cyber currencies from international technology groups and the rise of cryptocurrencies such as Bitcoin and Etherum.
In the autumn of 2021, the ECB launched a two-year research phase to identify the core features of a digital euro. The final decision on the introduction of a digital version of the euro should then be made in October 2023. It will probably be another three years before digital money is finally available to the public.
“No Race”
“This is not a race,” said Lagarde. But in fact, the euro area is at a relatively advanced stage in exploring a central bank-backed digital currency, otherwise known as a CBDC. The focus is now on their concrete design and their embedding in a reasonable legal framework.
For a digital euro to be a success, among other things, it needs to be ensured that it meets citizens’ expectations in terms of privacy protection. In ECB public consultations, which ran from October 2020 to January 2021, about 43 percent of responses prioritized the protection of privacy in a future digital euro.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
