European Central Bank President Christine Lagarde recently indicated that she’s still open to the idea of an ECB-issued digital currency. During an interview with the French magazine Challenges, Lagarde suggested that the bank would continue to explore cryptocurrency technology’s potential benefits for maintaining citizens’ access to currency as demand for physical cash diminishes over time.
Lagarde emphasized the importance of innovation to meet consumers’ demand for inexpensive, real-time payments. She also noted Europe’s 2018 infrastructure launch that provides “pan-European instant payments with direct settlement in central bank money.”
As for the future, she said that the central bank intends to continue to assess risks and benefits of a possible central bank digital currency, while encouraging continued private sector, market-led solutions to meet ongoing payment challenges.
“We are looking closely into the feasibility and merits of a CBDC, also because it could have major implications for the financial sector and for the transmission of monetary policy. At the end of 2019 we created an expert task force at the ECB that will work closely with the national central banks to study the feasibility of a euro area CBDC in various forms, covering all the practical aspects, including how to minimize possible unintended side-effects.”