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Digital Euro should launch in four years, says ECB's Christine Lagarde

Updated: Jul 25, 2024
Published: Apr 1, 2021
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Central bank digital currencies are fast gaining adoption globally as central banks look to catch up to the private sector in terms of digital currency development. The European Central Bank (ECB) doesn't want to be left behind and plans to launch its digital currency by 2025.

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ECB to launch the Digital Euro by 2025

ECB President Christine Lagarde is confident that the regional apex bank will launch the Digital Euro in four years. She said this in an interview with Blomberg yesterday, adding that the various decision-making processes would make it impossible to roll out the Digital Euro right away.

According to Lagarde, the decision to issue a Digital Euro will be made by the council of central bank governors in the region and the governing board members. After deciding to develop and issue a digital currency, they will have to work on the currency's technical and fundamental aspects to ensure that it enhances the current financial ecosystem rather than destabilize it.

"We need to make sure that we do it right. We owe it to the Europeans. The whole process, let's be realistic about it, will in my view take another four years, maybe a little more," she added.

Banks shouldn't be afraid of the change

Lagarde stated that private banks and other financial institutions are afraid of the CBDCs. However, she added that it shouldn't be the case as it would be impossible for the central banks to play the roles of issuing the digital currency, managing the economy, and offering credits. Hence, private banks will play a crucial role in the digital area as they will continue to provide services in both fiat cash and digital currencies.

According to Lagarde, what happened during the pandemic made it clear the direction the world is moving. People are now buying things online, paying for services, and carrying out virtually most of their activities online. Lagarde commented that everything is going digital and financial institutions need to adapt and make the necessary changes to improve their services.

The ECB chief said the bank would release the feedback on digital Euro's potential launch from a public consultation in which over 8,000 participants responded.

Four years, would that be “in time” to remain relevant or would have the world moved payments onto digital networks already by that time?

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