Policymakers at the European Central Bank (ECB) will meet in Frankfurt on Wednesday (Dec. 11) to talk about the pros and cons of introducing their own electronic money, Bloomberg reported on Tuesday (Dec. 10), citing Eurozone sources. Members of the Governing Council anticipate informal discussions about digital currency, which will take place ahead of a Thursday (Dec. 12) policy conference with Christine Lagarde, the ECB’s new president.
The debate among council members is expected to be more symbolic than action-oriented, since it is happening on the run-up to Lagarde’s inaugural verdict on interest rates. Lagarde has vocalized that she favors central banks releasing electronic money. When she led the International Monetary Fund, she said it could uphold public goals like economic cooperation and payment anonymity.
Facebook’s upcoming launch of the global stablecoin Libra triggered adverse reactions worldwide, but it was also a catalyst to discussions about digital currency and other schemes that bypass the established financial structure.
The ECB said it will launch its own electronic money, unless the private sector figures out how to speed up global payments and reduce the cost. It has asserted that tech ingenuity is changing the landscape of retail payments.
The People’s Bank of China has a digital currency in the works as well, and the Bank for International Settlements (BIS) released survey results indicating that the majority of central banks are looking into it. Bank of England Governor Mark Carney has even implied that an international central bank coin could supersede the U.S. dollar as the international reserve currency.
U.S. Secretary of the Treasury Steven Mnuchin, however, recently said that neither he nor Federal Reserve Chairman Jerome Powell feel it is necessary to introduce a Fed digital currency for at least the next five years.
In October, Britain was reportedly considering a ban on the sale of derivatives involved with cryptocurrency assets, such as bitcoin. Worldwide crypto exchanges have asked the country’s market watchdogs to refrain from the ban, and are claiming they are well-prepared to protect customers who choose to trade crypto.