Lagarde Says Digital Euro May Give Europe Greater Resiliency

A digital euro may provide Europe with greater resiliency and autonomy.

So said European Central Bank President Christine Lagarde during a virtual event hosted by the Bank for International Settlements, Bloomberg reported Tuesday (March 21).

Lagarde pointed to the fact that many Europeans depend on payment apps and cards are not European, just as the continent relied on Russia for its energy supply and found that the supply could be cut off during a time of conflict, according to the report.

“So we just have to be careful,” Lagarde said during the event, per the report. “Some people will call it sovereign autonomy; I prefer to call it resilience because that’s really what it is.”

Speaking on a panel focused on central bank digital currencies (CBDCs), Lagarde said there’s a trend toward using digital payments because they are safe, readily available and inexpensive.

At the same time, cash will persevere because it provides anonymity while digital currencies cannot, Lagarde said, per the report.

As PYMNTS reported Jan. 3, the investigation phase of the European Central Bank’s digital euro project has moved into technical considerations.

Lagarde told a conference in November 2022 that while the digital euro project had received “strong political backing,” it must balance the competing policy objectives of ensuring privacy and preventing financial crime.

The digital euro must “at least provide a level of privacy equal to that of current electronic payment solutions” for it to be attractive, while legislators must find “the right balance between the social value of privacy and the public interest in preventing illicit activities,” Lagarde at the time.

During a speech delivered in January, European Central Bank Executive Board Member Fabio Panetta said that a digital euro should complement, not replace, other electronic payment methods or cash.

“Our priority for the digital euro project has always been clear: to preserve the role of central bank money in retail payments by offering an additional option for paying with public money, including where this is not possible today, for example in eCommerce,” Panetta said in a Jan. 23 speech to the European Parliament’s Committee on Economic and Monetary Affairs.