Despite the COVID-19 outbreak, major cryptocurrency event Consensus 2020 officially kicked off in virtual mode with its first speaker, Yves Mersch, an executive member at the European Central Bank (ECB).
During his exclusive keynote on 11 May, Mersch spoke about central bank digital currencies (CBDCs), and the banks approach towards the idea. During his speech, the ECB official outlined that the bank had set up a task force to look into CBDCs earlier this year, and that it is expected to publish a preliminary report in the coming weeks. He further mentioned that the bank currently focuses on retail implementation of CBDC.
“A wholesale CBDC, restricted to a limited group of financial counterparties, would be largely business as usual. However, a retail CBDC, accessible to all, would be a game changer, so a retail CBDC is now our main focus.”
According to an April report by blockchain firm R3, all existing projects focus on wholesale CBDC implementation, making the European Central Bank the first to look at retail implementation. The ECB official did highlight that central banks are mainly focused on wholesale CBDCs, as a retail version could have a “major consequences for the whole financial system”. Though he did not mention the words “blockchain” and “distributed ledger” during his speech, Mersch said that CBDC could be based on digital tokens, which are circulated “in a decentralized manner”.
Though he outlined the banks focus on working on CBDC implementation, during his speech Mersch emphasized that cash remains the most popular payment method in the E.U.. He stated that in March, the latest month he had data for, as much as 76 percent of all transactions in Europe were carried out in cash, which amounted to more than half of the total value of all payments. Exploring CBDCs was a way for the bank to prepare in case the solution was ever needed.
“If and when time comes, we want to be ready, and let me assure, you we will be ready.”