Christine Lagarde, the European Central Bank President, believes the ECB should be ready to respond to people’s demands for digital currencies. She said it should create a European-based solution that does not jeopardize the whole banking system.
In July 2021, Lagarde said they have carried out the analysis, taken input from citizens and professionals, and conducted experiments with encouraging results. She highlighted that it led the ECB to move up a gear and start the digital euro project. The President said their work aims to ensure that in the digital age, citizens and firms continue to have access to the safest form of money, central bank money.
The ECB believes that a digital euro should meet the needs of Europeans while at the same time helping prevent illicit activities and avoid any undesirable impact on financial stability and monetary policy. The financial institution’s official portal states that it’s commencing an investigation to determine what a digital euro might look like. Commenced on October 2021, the study will go on for two years.
It will determine how a digital euro could be designed and how it could be distributed to merchants and citizens, alike. Moreover, the ECB wants to know its impact on the market and the changes that would be needed to be made to the European legislation.
The ECB chief believes that if customers want digital currency, it should be made available. Lagarde said the ECB should respond to the demand and be ready with a European-based solution. It should be secure, available under friendly terms, and also can be used as a means of payment at reasonable terms. But it shouldn’t jeopardize the whole banking system. It should be part and parcel of the proposal.