Christine Lagarde, European Central Bank (ECB) president, said the ECB could make its own digital currency within a few years, which could change up the eurozone financial sector drastically, Bloomberg reported.
It could be “two to four years” before the launch of any such currency, Bloomberg reported, because such an undertaking concerns issues like money laundering, privacy and the technology involved.
“My hunch is that it will come,” Lagarde said Thursday (Nov. 12) during a virtual panel discussion hosted by the ECB, per Bloomberg. “If it’s cheaper, faster, more secure for the users, then we should explore it. If it’s going to contribute to a better monetary sovereignty, a better autonomy for the euro area, I think we should explore it.”
But the two-to-four-year timeline would still be an improvement over some competitors, with U.S. Federal Reserve Chair Jerome Powell and Bank of England Gov. Andrew Bailey saying during the aforementioned panel that they are still cautious. According to Bloomberg, Powell said the issue would be approached “carefully and thoughtfully,” while Bailey said it would involve “a lot of hard work” to think about the “implications.”
China, meanwhile, is also advancing plans for a central bank digital currency (CBDC), Bloomberg reported.
Last month, the ECB introduced a new measure for public consultation, which will run until mid-January. Around the middle of next year, policymakers are set to decide whether to launch a full digital currency project.
The ECB’s message is that the digital currency idea would be a boost for consumers needing new ways to pay for retail purchases as the payments landscape evolves amid the pandemic. Lagarde said the ECB’s role is to secure trust in money, and preparation for a digital euro would be necessary for the coming changes in the global economy.