The European Central Bank may launch a digital euro in the next four years.
A conference on plans for a digital euro was held at the National College of Ireland in Dublin addressed by Dr. Fabio Panetta, member of the ECB Executive Board.
In October 2021, the ECB launched a two-year investigation to explore the possibility of launching a digital euro.
“By the end of 2023, we could decide to start a realization phase to develop and test the appropriate technical solutions and commercial agreements needed to deliver a digital euro,” said Dr. Panetta.
“This phase could take three years,” he added.
The ECB believes that the growing popularity of non-cash payments and the expansion of crypto assets reveal a growing demand for immediacy and digitization.
“If the official sector, central banks and supervised intermediaries do not meet this demand, others will,” said Dr. Panetta.
The ECB said that a digital euro would aim to offer a means of payment that is free, available for all digital payments and accessible to everyone, everywhere at a time when the large reduction in the number of bank branches may be affecting to vulnerable customers.
The ECB says that digital money issued by a central bank would serve as an instrument to accompany the digital transitions in payments that are already underway.
“This transition is particularly visible here in Ireland, where the financial landscape is undergoing a drastic change, with some of the major established banks pulling out and fintechs rapidly making inroads into the payments market,” said Dr. Panetta.
“A digital euro would bring important benefits in this context. It would level the playing field by allowing intermediaries, including small ones, who are often less able to keep up with the pace of innovation, to offer more technologically advanced products at a competitive price,” said. saying.
Nine countries around the world have now fully launched a digital currency and some large economies, such as China, are well advanced in their exploration.
In today’s conference, Dr. Panetta also made reference to the recent volatility in the cryptocurrency market.
“Recent developments in the crypto asset market illustrate that it is an illusion to believe that private instruments can act like money when they cannot be converted at par into public money at all times,” he said.
“Despite claims that cryptocurrencies are a reliable form of ‘currency’ free from public control, they are too risky to act as a reliable means of payment,” he said.
“They behave more like speculative assets and raise multiple public policy and financial stability concerns. Anyone who invests in cryptocurrencies should be prepared to lose their entire investment,” he warned.