The launch of a potential Digital Euro will happen mid this decade at the earliest, according to the European Central Bank president
Christine Lagarde, the European Central Bank president, has confirmed that the bank is considering a possibility to develop a Digital Euro. The decision to create a digital currency or not is set to be made in the summer. Lagarde reiterated that digital currency would not replace the current cash system.
If the European policymakers agree to launch the digital currency, Lagarde reckons it will take about four years to develop it. Based on this estimation, it is safe to conclude that the Digital Euro will arrive around the middle of this decade if approved before the end of the year.
Speaking in a Bloomberg TV interview yesterday, the ECB President asserted that the goal was to make sure the whole process is done the right way, even if it takes a while. Her estimated timeline factors in the several lengthy stages where decisions have to be made.
“We need to make sure that we do it right—we owe it to the Europeans”, she said. “The whole process – let’s be realistic about it – will, in my view, take another four years, maybe a little more”.
The bank is set to deliver the results of a review of 8,000 responses submitted during the consultation process studying the creation and deployment of a digital currency. The analysis report will be forwarded to the European Parliament and then to the Governing Council, where the decision to continue or halt the process will be reached.
The first decision will be to determine whether or not to proceed with experimentation of the digital currency. A second decision aimed at settling the uncertainties around rolling out the currency will then follow six to twelve months afterwards. Lagarde explained that taking this approach ensures that the system is not compromised.
“It’s a technical endeavour as well as a fundamental change. We need to make sure that we’re not going to break any system, but to enhance the system.”
Several central banks worldwide are studying the feasibility of digital currencies, with a few of them being in advanced stages of developing the same. Lagarde pointed out that she will be closely monitoring Bahamas’ digital currency, the Sand Dollar. Though the Sand Dollar currency is digital, it is not decentralised per se as the Central bank of Bahamas regulates it.