Digital Euro Should Complement, Not Replace Cash, Says ECB President

If the European Central Bank (ECB) creates a digital euro, it should only complement but not replace traditional cash, said ECB President Christine Lagarde at the Franco-German Parliamentary Assembly today.

“We are also exploring the benefits, risks and operational challenges of introducing a digital euro,” Lagarde said, in her speech, adding, “A digital euro could be a complement to, not a substitute for, cash. It could provide an alternative to private digital currencies and ensure that sovereign money remains at the core of European payment systems.”

Lagarde noted that Europe needs to get all the benefits of digital technology.

“At European level, this should be complemented by accelerating progress towards the Digital Single Market to help deliver economies of scale for digital firms, while addressing key concerns around cybersecurity and data protection,” she said.

In November, the ECB published a report on issuing a central bank digital currency (CBDC), which was later presented to the public for feedback. On September 10, Largarde announced that there would be a consultation on the idea of issuing a digital currency in the coming weeks.

As Decrypt reported on September 15, platform Societe Generale Forge—which was chosen by the French central bank in its call for applications to develop a CBDC for interbank settlements—has announced that Tezos will be used for French CBDC trials.

However, China is still much ahead—and plans to continue that lead. It’s already rolling out its digital currency in stages and aims to be the first country to have a fully digital currency. 

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track,” said commentary from China’s central bank, in an article in China Finance, which is run by the People’s Bank of China (PBOC).

But perhaps France won’t be too far behind.