European Central Bank sees no ‘concrete need’ to issue a digital Euro, says Mario Draghi
According to Reuters, the chief of the European Central Bank (ECB) said on Friday that the institution sees no “concrete need” to issue a digital version of the euro.
In a letter to a member of the European Parliament, ECB President Mario Draghi said a lack of robustness in the technology that would underlie such an endeavor, as well as the high levels of physical cash use across the EU, meant the option is not on the table at present.
“The ECB and the Eurosystem currently have no plans to issue a central bank digital currency,” he said.
He also stressed the need for more research and development in the field of digital ledger technology (DLT) and blockchain and said that a likely prime candidate for the basis of a central bank digital currency (CBDC), would “require substantial further development.”
According to research done by the European Central Bank own team, cash still constitutes about 78.8 percent of all payments at the points of sale across the EU. Payments by credit and debit cards, meanwhile, made up 19.1 percent and the remainder (2.1 percent) were made using other instruments.
The report further goes on to state that, “This seems to challenge the perception that cash is rapidly being replaced by cashless means of payment.”
Others feel the time is just right
While the ECB at present might not consider DLT mature enough for wider applications, there are others who are taking the lead in exploring the possibilities of blockchain.
In late August, the Bank of Thailand made it public that they have plans to complete the first phase of a proof-of-concept trial for a CBDC by next March. For the effort, the central bank has partnered with eight domestic financial institutions and will build the product on Corda, a DLT platform developed by R3 Consortium.
China is also making rapid strides towards the launch of CDBC. Earlier this year in June, the Digital Currency Research Lab at the People’s Bank of China filed more than 40 patent applications so far pertaining to its planned digital currency – one that would combine the core features of cryptocurrency and the existing monetary system.
Regarding the patents, the People’s Bank of China (PBOC) had said, the ultimate objective is to be able to “break the silo between blockchain-based cryptocurrency and the existing monetary system” so that the digital currency may contain cryptocurrency-like features while being extensively utilized in the existing financial structure.
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