The European Central Bank (ECB) released a statement on Wednesday announcing plans for a digital Euro project. The project will begin with an “investigation phase” which would last 24 months and concentrate mainly on distribution and design. The announcement is coming after the ECB published an exploratory report that revealed the digital Euro task force’s findings in October 2020.
The announcement further explained that the ECB’s central bank digital currency must “prevent illicit activities” and maintain financial stability. Furthermore, the digital Euro would be used to complement cash and not a substitution for it.
President of the ECB, Christine Lagarde, while speaking on the plan, said that since the institution published its report nine months ago, they have conducted further analysis and experiments. Lagarde also said that further consultations with citizens and professionals spurred the ECB to speed up its plans. She said:
“All of this has led us to decide to move up a gear and start the digital euro project.”
The Euro is the official currency of 19 out of 27 members of the European Union (E.U.) and is the second most traded currency after the U.S. dollar. With over 26 billion banknotes in circulation as of May 2021, the creation of a digital Euro will significantly impact the European and the global economies.
The ECB is not the only central bank planning to create its own Central Bank Digital Currency (CBDC). Countries like China, Japan, Sweden, Ghana, Indonesia, the U.K., and the UAE also have similar plans for their national digital currencies.
Image Credits: Pixabay
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