The European Central Bank (ECB) has declared that it is not interested in developing its own cryptocurrency.
According to a release by the President of the European Central Bank Mario Draghi, the ECB and the Eurosystem do not have plans to issue a digital currency owned by the ECB. Draghi declared that the committee is exploring the possible results that might emerge from issuing its own cryptocurrency. However, he noted that this is only an analysis at the moment and would be used in order to complement cash, rather than to replace it.
He continued to say that they are closely watching the activities that other central banks are working on. This is order to work with the “central bank community” in the topic of standards that must be set and met. This might pertain to bodies such as “the Committee on Payments and Market Infrastructures (CPMI).“
“Our analyses consider the implications for the transmission of monetary policy, payment systems, financial stability, and the economy more broadly.”
The president explained further that the concept of a central bank cryptocurrency holds both advantages and disadvantages. He argued the point from an economic perspective. On one hand, a Central Bank digital currency could be beneficial as it could meet the demands of security. Draghi offered that the idea could also “allow monetary policy to reach a wider range of economic actors more directly.”
On the other hand, however, a digital currency could present costs and risks that the central bank cannot afford currently. He concluded the release on a note that suggested that a central bank digital currency is not something we can expect soon:
“[Current] conditions do not indicate that there is a concrete need to issue a central bank digital currency in the euro area. The demand for euro banknotes continues to grow, and cash remains a popular means of payment. Moreover, there is an increasing range of options for digital payments which allow non-cash transactions to be completed almost as immediately as cash transaction”.