A Busy Month for CBDCs

ECB: PUBLIC CONSULTATION

On 12th October the European Central Bank (ECB) opened a public consultation on the creation of a Digital Euro, a Central Bank Digital Currencies (CBDCs). The logic is that the increased usage of digital payments may mean that a Digital Euro is needed to safeguard citizens. A decline in cash usage or the launch of a private sector digital currency, such as the Libra, may also require a Digital Euro that addresses regulatory concerns and maintains financial stability.

At the same time the European Union has launched a public consultation for a Retail Payment Strategy and during a webinar about it, a Digital Euro was also discussed. The European Commission’s head of retail financial services and payment unit, Eric Ducoulombier, said, ‘A digital euro solution should not crowd out solutions that come from the private sector. In the ECB report, it is highlighted that such a solution would be complementary to private sector opportunities. There should not be rivalry or competition.’ At a virtual IMF event the ECB president Christine Lagarde said “A digital euro will never be a substitute for cash. It is a very good supplement and a very good partial substitute for what was being done physically.”