Another 4 years until the e-euro

Everyone is talking about central bank digital currencies. But while the release is imminent in some places, EU citizens will have to be patient for a while. For good reason, according to Christine Lagarde.

It will be some time before the official start of the digital euro. According to Christine Lagarde, President of the European Central Bank (ECB), “realistically” 4 years should be planned for the development of a European, digital central bank currency (CBDC).

In one interview with Bloomberg, Lagarde gave an insight into the European decision-making process on March 31st. Accordingly, the ECB is planning to publish the results of its open survey on the e-euro, in which citizens, companies and other organizations had participated, in the near future. The evaluation of these 8,000 answers is sent to the EU Parliament and the other decision-making bodies.

Based on this, the Governing Council should decide in mid-2021 whether to start experiments on a European CBDC. The final decision for or against a digital euro can be expected again 6 to 12 months later. Only this decision would then be at the beginning of the actual roll-out process. Lagarde added that the Covid-19 pandemic would have significantly boosted the trend towards digital payments.

ECB wants security and stability

The development time of several years for the digital euro is more than appropriate, according to Lagarde. Finally, the ECB wants to ensure that at the end of the process there is a “safe, stable and protected payment mechanism”:

Because it’s both a technical endeavor and a fundamental change, and we need to make sure we’re getting it right. We owe that to the Europeans, they have to feel safe and secure.

Lagarde said some banks were concerned about the CBDC plans. From their perspective, however, this concern is inappropriate. Intermediaries in payment transactions would remain in place even after the introduction of the e-euro, and the central banks do not intend to take over the tasks of customer banks all at once. The cash will also continue to exist. Lagarde’s interview: The ECB does not want to fundamentally change the existing system, but rather adapt it to the requirements of digitized payment processes.

The ECB published a report last October in which it outlined its ideas about the digital euro. At that time it was not yet clear whether the digital euro would be designed for the needs of private customers or those of industry.

In the meantime, the Digital Euro Association (DEA) has formed a pan-European panel of experts. DEA has set itself the task of accompanying the digitization of European payment systems with its specialist knowledge and actively helping to shape it.