The European Central Bank (ECB) has published a report on the possible issuance of a digital euro, prepared by the Eurosystem High-Level Task Force on central bank digital currency (CBDC) and approved by its governing council.

A digital euro would be an electronic form of central bank money accessible to all citizens and firms to make their daily payments in a fast, easy and secure way. Crucially, the ECB stated that it would complement cash, not replace it.

“Europeans are increasingly turning to digital in the ways they spend, save and invest," stated Christine Lagarde, ECB president. "Our role is to secure trust in money, this means making sure the euro is fit for the digital age; so we should be prepared to issue a digital euro, should the need arise.”

The Eurosystem task force, bringing together experts from the ECB and 19 national central banks in the euro area, identified possible scenarios that would require the issuance of a digital euro.

These included an increased demand for electronic payments in the euro area that would require a European risk-free digital means of payment; a significant decline in the use of cash as a means of payment in the euro area; the launch of global private means of payment that might raise regulatory concerns and pose risks for financial stability and consumer protection; and a broad take-up of CBDCs issued by foreign central banks.

“Technology and innovation are changing the way we consume, work and relate to each other,” said Fabio Panetta, member of the ECB’s executive board and chair of the task force. “A digital euro would support Europe’s drive towards continued innovation - it would also contribute to its financial sovereignty and strengthen the international role of the euro.”

The governing council has not taken a decision yet on whether to introduce a digital euro and the Eurosystem will engage with citizens, academia, the financial sector and public authorities to assess their needs, as well as the benefits and challenges they expect from the issuance of a digital euro.

A public consultation will be launched on 12 October. The ECB added that experimentation will start in parallel, without prejudice to the final decision.

Share Story: