In brief

  • ECB president Christine Lagarde today said that a decision on whether to release a digital Euro will be made by the middle of this year.
  • But the actual release of a European central bank digital currency will take years, she added.

A decision on a digital Euro will be made in the next few months—but the actual release of such a currency could take years, European Central Bank boss Chirstine Lagarde said today. 

The ECB president told Bloomberg that the whole process of developing a central bank digital currency (CBDC) could take at least another four years, though the Bank plans to make a decision on whether to move on the initiative by "mid-2021."

A CBDC is a digital version of a fiat currency (in this case, the euro) that is backed by a central bank. Countries around the world are currently researching the benefits of developing such an asset. 


“But the whole process—let’s be realistic about it—will in my view take another four years,” Lagarde said. “Maybe a little more, but I would hope that we could keep it within four years because it’s a technical endeavor as well as a fundamental change.”

She said that the ECB would make a decision soon on whether to actually release a CBDC. After all, that "mid-2021" target is only three months away. If lawmakers give the green light, work on developing the technology will then start.

“We need to make sure that we do it right,” Lagarde added. “We owe it to the Europeans. They need to feel safe and secure. They need to feel that they are holding a central bank-backed digital bank note.”

Lagarde last year said that a digital euro would be a good idea as it could complement cash and possibly create new jobs. 


But her comments today show that the central bank is behind other major economies. China, for example, is well ahead of the game: in October the People's Bank of China settled over three million payments in digital yuan.

The ECB and US Federal Reserve appear to be treading more cautiously. Last month, Federal Reserve Chairman Jerome Powell said that the US central bank was not rushing a CBDC and was not in “in the mode of making a decision at this point.”

Lagarde today reiterated that the ECB would make the decision after analyzing responses from a public consultation on the matter. 

“We need to make sure that we are not going to break any system but enhance a system,” she added. 

Lagarde, who became the ECB president in November 2019, is not a fan of decentralized digital assets. In January she said that Bitcoin was “a highly speculative asset” involved in “money laundering activity” that must be regulated. 

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