The European Central Bank (ECB) has applied to trademark the term “digital euro” in a move that demonstrates the bank’s enthusiasm for a central bank digital currency (CBDC).
The ECB filed an application for the trademark on September 22, according to a Thursday Bloomberg report. The ECB is currently preparing a report on releasing a CBDC.
Once the ECB releases the report, which will detail the advantages and disadvantages of creating a CBDC for retail use across Europe, the ECB will consult the public in a questionnaire. The public will then have feedback on the findings—and shape the future CBDC policy.
Countries around the world are working on research into CBDCs—digitized versions of native fiat currencies, such as the euro, US dollar, or Japanese yen.
In the case of the ECB, the euro would become digitized in the hope that it would make transactions smoother, minimize cash use, and help banks lower interest rates.
ECB President Christine Lagarde has been talking about a CBDC for years now. In 2018, before she became president, she was already floating the possibility of a digital currency for Europe.
But despite central banks around the world exploring the possibilities of CBDCs, one is yet to be released.
China is well ahead of the game and is already testing a digital yuan. While western Europe and the US are still cautiously researching the idea of such a currency.
A CBDC would be very different to a cryptocurrency like Bitcoin or Ethereum because it would be centralized and controlled by one entity—a central bank. Critics of central bank digital currencies have said privacy considerations must be taken into account, as CBDCs have the potential to offer all the traceability of cryptocurrencies with none of the anonymity of cash.