Europe’s guardians intensify their work on a digital euro. "People in Europe are increasingly paying, saving and investing electronically. Our task is to ensure confidence in our preservation. That is why we must ensure that the euro is ready for the digital age", European Central Bank (ECB) President Christine Lagarde said Friday, according to a statement. "We should be prepared to introduce a digital euro, should this become necessary."
Technically, a digital euro would resemble bitcoin. But unlike the cryptocurrency, it would be under the supervision of a central bank. Digital currencies work on the basis of a blockchain – i.e. a chain of data blocks that expands with each transaction. Such a euro will exist as a digital unit and will be available for online transactions.
Complement to cash – not a substitute
The ECB explained that such an electronic form of central bank money could be used by the general public – just like cash, only in digital form. The custodians ared that a digital euro would be a complement to cash, not a substitute: "In any case, the Eurosystem will continue to ie cash."
So far, the ECB’s Governing Council has not taken a decision on iing a digital euro, according to the central bank in Frankfurt. An exchange with burghers, academics, the financial sector and authorities is now planned to weigh up the advantages and disadvantages of a digital euro. A public consultation process will be launched on October 12. October. At the same time, the test phase will begin, regardless of the final decision, the ECB said.