ECB to Decide on Digital Euro by Mid-2021
- ECB’s Governing Council will decide whether to proceed with digital euro trials after reviewing responses from the public.
- Even if it greenlights trials in mid-2021, it could take another 4 years before the digital euro is fully launched.
European Central Bank (ECB) sign in the financial district in Frankfurt, Germany. Shutterstock
In an interview with Bloomberg, the European Central Bank President Christine Lagarde said the decision will not be made by her, but by the ECB’s Governing Council. The bank is about to release an analysis of the 8,000 responses it received as part of the public consultation process regarding the launch of the digital euro. The report will be sent to the European Parliament for consideration, after which the Council will use it as a guide to decide whether to move forward with the CBDC practical experimentation.
However, the final decision on whether to roll out the digital euro will happen six months to a year after that, Lagarde said. The entire process of developing, testing, and releasing a digital euro could take another four years.
“It’s a technical endeavor, as well as a fundamental change,” she explained in the interview. “We need to make sure we’re not going to break any system, but to enhance the system.”
In the following months, the ECB will be “closely monitoring” the release of a national digital currency in the Bahamas, dubbed the “Sand Dollar.”
- The bill will serve as the legal foundation for the European Central Bank’s ongoing technical work on a euro-based CBDC.
- The European Commission is also planning to call the public for comments next month on how the digital euro could be used.
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- Led by Euroclear, the CBDC trial was conducted with the help of Banque de France, BNP Paribas, Crédit Agricole CIB, HSBC, and Société Générale.
- As part of the test, almost 500 instructions in both primary and secondary markets were executed.
- The European Central Bank received over 8,200 responses on its digital euro public consultation, 94% of which were from private citizens.
- The top priority for 43% of citizens and professionals who responded was for their payments to remain private.