
A new study by the European Central Bank warns that there are risks to economic stability if central banks don't offer CBDCs. The report, written by economist Massimo Ferrari and international economist Arnaud Mehl, highlighted the need for CBDCs and how they are key to future financial strength.
The authors said, "Attention should be paid to the risks to stability that might arise if a central bank does not offer a digital currency. Issuing a CBDC would help to maintain the autonomy of domestic payment systems and the international use of a currency in a digital world."
The pandemic also accelerated the adoption of digital payment options, as people spend a chunk of last year at home. So far, a few countries, including China, have advanced in the development of their digital currencies. China is already testing its digital Yuan to see how it would perform in the real world.
The ECB under President Christine Lagarde has positively received the idea of developing the digital Euro to complement physical cash. However, the ECB is still figuring out the necessary infrastructure behind the digital Euro. Lagarde predicts that the digital Euro should launch in four years.
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