Christine Lagarde, head of the European Central Bank (ECB), has proposed that if the organization chooses to introduce a digital Euro, it should be borderless to enable cross-border payments.
Lagarde said at the Forum on US-European GeoEconomics on September 28 that the borderless nature of the Internet necessitates worldwide collaboration among central banks in the creation of the currency, while also emphasizing the necessity for rules.
“Digital money is borderless, it should not be borderline, and it should never cross the line; thus, it should be controlled and adequately overseen. But it may greatly ease cross-border transfers, which is why the United States authorities, European authorities, and others need to share notes, as stated by Lagarde.
The ECB president also dismissed worries that the introduction of a digital version of the Euro will destroy cash since the majority of people are still wedded to banknotes. She said that the majority of individuals tied to bank notes are worried about privacy.
Lagarde acknowledged that worries exist over the privacy of the digital Euro, but she provided assurances that if the bank chooses the central bank digital currency (CBDC) path, user information would be protected. However, she noted that the bank should be prepared to give a digital Euro if people decide they want one.
Notably, the ECB is one of many central banks undertaking CBDC-powered payment research. The bank has not yet provided an update on the release of such a currency.
More banks are emphasizing CBDCs
The pursuit of CBDCs by the world’s main central banks has arisen as a means of limiting the impact of private cryptocurrencies such as Bitcoin (BTC). In this regard, Lagarde has criticised cryptocurrencies, claiming they are worthless.
According to a report by Finbold, the ECB chairman said that the emergence of cryptocurrencies might usher in the age of free banking. According to Lagarde, cryptocurrency might impede the job of central banks as the anchor of the economy.
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