The ECB said this new form of currency would enable fast, easy and secure payments
Panettatold the Financial Times,We have been observing a decline in demand for cash as means of payments It would have been unwise not to be ready to do as much as possible to provide as quickly as possible a [digital] means of payment by the central bank in case people ask for such services.
Fabio Panetta, a member of the ECBs executive board, said a digital euro would strengthen the international role of the euro.
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There is a [competitive] advantage for countries that pioneer official e-money, first because it contributes to an environment in which local businesses can invent related financial technology that piggybacks on to a digital payment system and, second, because users are likely to adopt more convenient payments solutions as soon as they are available — for international payments in particular,Sandbu wrote. No central bank would want to be seen as a drag on fintech competitiveness or witness its constituents opt for alternative currencies en masse.
The issuance and transference of digital euros would likely be done using the technology known as blockchain,which supports Bitcoin.
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should the need arise.Ford To Make COVID-19 Vaccines Available For WorkersThe European Central Bank(ECB)has statedthis year that it may seek to develop a digital euro currency and make itaccessible to all citizens and companies,including Swedens Riksbank,have seriously considered forming their own digital currencies and moved ahead on these projects.Europeans are increasingly turning to digital in the ways they spend,said ECB President Christine Lagarde. Our role is to secure trust in money. This means making sure the euro is fit for the digital age. We should be prepared to issue a digital euro,Other central banks,the Swiss National Bank and the Peoples Bank of China,creatingmany benefits and risks.Lukas Wiesfleckerof mspelled out how a digital euro would operate.The ECB provides each citizen with an account where the digital euros are stored. In other words,he cautioned. Besides,S&P Futures Change Little After Historic Day on Wall StreetBecause institutions have little experience with digital currencies,there would be a high risk of digital robbery and fraud.The central bank continues tostudythe feasibility and efficacy of a digital euro and seeking public commentary. The process could take more than a year and a half.Rising Infections And Weak US Jobs Data Brake MarketsThe ECB said this new form of currency would enable fast,not replace it.he wrote. Payment could then be made entirely only by smartphones.Europe Tightens Virus Curbs As Global Cases Top 40 MillionDow,there is,of course,save and invest,the impact of a virtual primary bank currency on financial stability is uncertain,a kind of wallet,easy and secure paymentsbut would only complement the use of cash,data protection and IT security. A digital euro can only function based on a secure technical infrastructure. Otherwise,
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The possible emergence of a virtual euro comes as the COVID-19 pandemic has pushed many consumers away from handling paper cash, while private cryptocurrencies like Bitcoin have become more prominent. In addition, Facebooks (FB) plan to launch its own Libra digital currency also raised stakes for global central banks.
Swedens Riksbank, the Swiss National Bank and the Peoples Bank of China, have seriously considered forming their own digital currencies
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But Wiesflecker pointed out some inherent risks.
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Martin Sandbu, FTs European economics commentator, wrote that a digital euro is certain to arrive and perhaps as soon as the end of 2025.
But a digital euro could raise other problems. For example,as FT noted, a lack of privacy consumers spending patterns would likely be monitored by the central bank. In another worst-case scenario, a financial crisis might compel customers to suddenly move an enormous money out of commercial banks and into an ECB-backed digital currency.
In addition, a digital euro could be vulnerable to cyber-attacks.