The European Central Bank (ECB) is becoming serious about the development of a digital euro as it has published a 50-page comprehensive report on Friday, admitting its importance.
Drafted by the Eurosystem High-Level Task Force on central bank digital currency (CBDC) and approved by the Governing Council, the report outlined that the 28-nation bloc needs to be ready with a digital currency to launch when the need arises.
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Additionally, it stressed that the proposed digital euro will complement the existing cash-based economy, rather than many theories suggesting harm.
Moreover, the ECB pointed out four scenarios that would force it to issue a digital currency, including an increase in electronic payments or a decline in cash usage, private players entering the payment industry, and the issuance of digital currencies by other central banks.
Furthermore, the digital euro would offer easy access to payment methods, thus improving financial inclusion, according to the ECB.
However, the report revealed that the European central bank did not decide anything on the CBDC issuance. It came after Bloomberg confirmed that the ECB has filed for a trademark for the phrase ‘digital euro’.
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Fabio Panetta, a member of ECB’s executive board and the former head of the Italian central bank, also published a post mentioning the importance of the digital dollar development.
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“Whether or not we need a digital euro is a fundamental and pressing question, and the ECB and the national central banks of the euro area are considering it together,” Panetta noted.
The Frankfurt-based regulator will open pubic consultation on the issuance of a digital euro on October 12 “to hear the views of the public and interested stakeholders.”
Meanwhile, central banks of the many European countries are actively indulging in digital euro development. France seems to be at the forefront as the country’s central bank and has already piloted it with private partnerships.