European Central Bank: ‘No Plans’ for Digital Currency, Cash Demand Growing | Crypto
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Addressing a query by MEP Jonás Fernández, Draghi said “substantial development” was still needed in the underlying technology behind cryptocurrencies before the Central Bank would consider using them.
“The ECB and the Eurosystem currently have no plans to issue a central bank digital currency,” he summarized:
“Nonetheless, we are carefully analysing the potential consequences of issuing such a currency as a complement to cash.”
Explaining why no plans were afoot at the ECB, Draghi drew attention to those same factors.
“…The technologies which could potentially be used to issue a central bank digital currency […] have not yet been thoroughly tested and require substantial further development before they could be used in a central bank context,” he told Fernández, adding:
“With regard to the central bank administering individual accounts for households and companies, this would imply that the central bank would enter into competition for retail deposits with the banking sector and lead to potentially substantial operational costs and risks.”
He added there was at present “no concrete need” to issue an additional currency within the eurozone, saying demand for cash banknotes “continues to grow” in the EU28.
Draghi continues the wary stance the 28-member bloc has traditionally held on bank-issued cryptocurrency, in contrast to moves by countries such as Russia and China.
Earlier this year, a joint report from the ECB and Bank for International Settlements (BIS) highlighted “side effects” of a potential launch of such a currency, also considering the need for more research beforehand.