Foreign CBDCs are most likely going to be considered legal tender by European Central Bank
According to Bloomberg, Central Bank Digital Currencies (CBDCs) developed by foreign institutions are more likely to become legal tender in the euro area.
European Central Bank: CBDCs to be considered as legal tender
The possibility of this outcome was confirmed by European Central Bank (ECB) board member Fabio Panetta on Tuesday in Helsinki, according to U.today. With the exercise of legal tender status, foreign CBDCs will act like any foreign currency.
Elvira Nabiullina of the Central Bank of Russia also shared her thoughts on the importance of the proper conversion of different forms of money, which will directly impact trust in digital assets.
The recognition of digital forms of payments by central banks is an important step in removing the fear of today’s consumers. In addition, if CBDCs from foreign banks become part of the traditional economic system, regulated stablecoins could also stand a chance of being recognized as legal payment tools in various countries.
Panetta has said that the European bank cannot just ignore or consider illegal currencies issued by the official central banks of countries. The ECB will begin the process of examining central bank digital currencies in the next two years.
Read more:
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- Federal Reserve Governor Lael Brainard: The United States Needs To Have A CBDC