Christine Lagarde – head of the European Central Bank (ECB) – has been providing her supportive stance, towards the bank’s progress of designing a new CBDC.
Specifically, the bank is putting in resources for building a new CBDC, in response to the urgency of cross-border payments with an enhanced speed and reduced cost.
Lagarde, during her talk with the Challenges magazine, has answered a question regarding the progress ECB is making in coming up with a new CBDC. She highlighted the current urge for upgraded versions of cross-border payments, and believed that the ECB should be on the front of the line, instead of just staying aside and merely observing.
“ECB will continue to assess the costs and benefits of issuing a central bank digital currency that would ensure that the general public remains able to use central bank money even if the use of physical cash eventually declines.”
Lagarde notified that the ECB is putting in examining work, feasibility and merits-wise, of a CBDC, since that type of payment could potentially create impact on the financial industry, and transmission of monetary policy.
The ECB will also set up a task force, which will work alongside national central banks, to research the feasibility of a CBDC within the EU region.
“We are working on all aspects of CBDC, with in-depth analysis of costs and benefits of such a new form of central bank money. It will take a while before we will communicate on our conclusions.”