European Central Bank: Proper eCurrency Launch Could Take Years

The European Central Bank (ECB) said it could introduce a digital currency sometime this decade but it will take a few years to launch it properly, Bloomberg reported on Wednesday (March 31).

Christine Lagarde, president of the ECB, said that it is possible a digital coin could roll out in the middle of this decade, providing lawmakers support the initiative this summer. 

“We need to make sure that we do it right — we owe it to the Europeans,” Lagarde told Bloomberg. “The whole process — let’s be realistic about it — will in my view take another four years, maybe a little more.”

Europe’s central bank conducted a survey regarding the possible introduction of a digital currency and is currently analyzing responses from the 8,000 participants. The results of the analysis will be shared with the European Parliament and the Governing Council, which is the ECB’s decision-making arm. A decision on whether to proceed is anticipated in the middle of 2021, per Bloomberg. 

Lagarde said the second big decision being explored is whether to launch a digital currency at all, something that should be decided by September.

“It’s a technical endeavor as well as a fundamental change,” Lagarde told the news outlet. “We need to make sure that we’re not going to break any system, but to enhance the system.”

She added that no matter how the situation moves forward, cash will continue to be an available option. 

Lagarde also said that she is paying attention to the launch of a digital currency by the Bahamas. The Sand Dollar is backed by the state and meant to foster financial inclusion across a region composed of over 700 islands.

Fabio Panetta, ECB member, expressed concern in February that digital money from a country’s financial authority could cause fiscal instability. He advised that in order to prevent bank runs, safeguards could be instituted that would make holding more than 3,000 euros a financially inadvisable position.