Regulation

ECB Continues Assessing ‘Feasibility And Merits’ Of Digital Currencies

They could have major implications for the financial sector and the transmission of monetary policy, says Christine Lagarde.
Vincent RyanJanuary 9, 2020

The European Central Bank (ECB) is sticking to its guns on playing “an active role” in the digital currency field, said ECB’s President Christine Lagarde on Wednesday.

What Happened

The ECB will continue assessing the risks and benefits of issuing a central bank digital currency (CBDC), said Lagarde in an interview with French business magazine, Challenges.

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“We are looking closely into the feasibility and merits of a CBDC, also because it could have major implications for the financial sector and the transmission of monetary policy, Lagarde said.

Why It Matters

Lagarde’s statement comes just a month after she said that the ECB should be “ahead of the curve” on the digital currency field.

ECB President Christine Lagarde

Innovation in digital payment systems, Lagarde said in the Wednesday interview, should help meet the urgent need for faster and cheaper cross-border transactions.

Eurosystem, the monetary authority of the eurozone, in 2018 launched a pan-European instant payment system. It allows banks in European countries to transfer funds between themselves round-the-clock in a matter of seconds, said Lagarde, stressing that the ECB is already playing an active role in the digital currency field.

The ECB’s efforts around a CBDC “neither discourage nor crowd out private market-led solutions for fast and efficient retail payments in the euro area,” Lagarde said.

This story originally appeared on Benzinga. 

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