European Central Bank supported own digital currency for faster and cheaper payments

The European Central Bank (ECB) has said that it could one day consider the ability to issue its own digital Euro if the private sector does not guarantee the convenience of changeover for cross-border payments.

ECB-digital-currency

Three decision-making bodies run the European Central Bank (ECB). The Executive Board carries out the current ECB business. The Board of Directors builds a monetary policy for the European Commission. The General Assembly is interested in the relationship between the countries that have applied the Euro and those European Union nations which have not.

The ECB revealed that technological innovation is rapidly changing the way retail payments are made, including reducing cash usage, in a Bloomberg report reported on Wednesday. The central bank said it was analyzing the situation and they would be ready to respond if needed.

According to this document, “if industry efforts fail to develop an innovative and efficient pan-European payment solution, then the social needs for it can be met by issuing a central bank digital currency”.

They added that a CBDC as a legal tender could ensure that all users have access to a cheap and easy means of payment.

Therefore, the ECB will continue to explore the benefits of digital currencies and be ready to act if needed in the future to issue. Signs of the future decline in cash use could be a catalyst in promoting CBDC’s regional central bank efforts.

At the same time, the central bank wants private companies to continue exploring and building more effective retail payment solutions in the euro area. ECB fully supports market-based initiatives that work towards a European-wide payment solution for point of sale and online payment.

According to a direct report from the ECB, European retail payment innovations are failing. This will be the main reason why the central bank will be motivated to come up with this new solution.

Last week, outgoing Board member Benoit Coeure argued that retail payment progress across Europe was slow and the market remained fragmented although ECB’s TIPS instant payment system was launched a year ago. He said the over-reliance on foreign players could put Europe at risk.

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