ECB Exploring Benefits & Risks of Digital Euro to Provide an Alternative to Crypto: President
In her introductory remarks, during the Franco-German Parliamentary Assembly on Monday, ECB President Christine Lagarde said they are “exploring the benefits, risks and operational challenges of introducing a digital euro.”
This ensures the strength and autonomy of European payment systems as the digital euro could be complemented to cash. She said,
“It could provide an alternative to private digital currencies and ensure that sovereign money remains at the core of European payment systems.”
While Lagarde, like other regulators, wants to keep the control of money issuance with the central banks, Galaxy’s Mike Novogratz says that it doesn’t matter because just like the traditional version, the digital one would devalue as well.
“Digital Central Bank issued FX is coming. I believe it will help the adoption of BTC and other crypto’s as well. If those same CBs keep printing their FX like its toilet paper, the digital version will depreciate. BTC won’t,” Novogratz said.
Shaping Europe’s Future
According to Lagarde, digitization is one of the trends that pandemic has the potential to accelerate.
“Trends that will lead to structural changes in the global economy.”
“We need to fully reap the potential gains from digital technologies and, at the same time, make sure labour markets remain inclusive,” she said.
Lagarde talked about accelerating the progress towards the Digital Single Market through economies of scale for digital firms.
Besides the digital euro, she also touched upon transitioning to a carbon-neutral economy and the coronavirus crisis, which is of “unprecedented magnitude,” giving Europe the “opportunity” to strengthen the Union.
Lagarde said ECB expects a rebound in activity in the second half of the year and judged that the economy still needs fiscal support for the recovery to continue and strengthen further, which has been critical in alleviating the impact of the pandemic.