The President of the European Central Bank (ECB), Christine Lagarde, during her first meeting on the Digital Currency Task Force, said that the ECB should clearly define its objectives by mid-2020.
Before that, the Governing Council of the European Central Bank met to set the reference interest rate and the outlines of monetary policy. Shortly after this meeting, the new ECB President, Christine Lagarde, convened her first press conference with ECB Vice-President Luis de Guindo.
Christine Lagarde spoke about the digital currency for Europe
Among other things, Lagarde said that the central bank would seek to set specific targets for its own digital currency and that it hopes to achieve satisfactory results already in the first half of next year. She stressed that before the development of the digital euro, the ECB must set the priorities and objectives it intends to achieve through a special task force. Lagarde revealed that the main objectives will be to reduce costs, to cut off intermediaries and to make financing effective and “cost-free”. She added that there were many other aspects that would need to be addressed.
She acknowledged that she saw a high demand for stablecoins and the related need for the ECB to introduce such a currency, although she explicitly ignored Bitcoin in these considerations. Christine Lagarde responded to the interest in the ECB project on the part of the British and Canadian partners.
President Lagarde said:
As I personally believe and given the developments we are seeing, and not so much on bitcoin as on stablecoin projects (…) it is better to stay ahead of the competition because there is a clear demand for them and we have to respond to them.
ECB digital currency – advantages and disadvantages
There have already been a number of media reports since last month that the European Central Bank authorities have been reflecting on the issue of their own digital currency. The overriding aim is supposedly to protect against the impact on Libra’s financial markets of the Facebook digital currency that has been developed for several months now. As European politicians are very critical of Libra, the central bank is currently considering the advantages and disadvantages of the digital currency.
According to the ECB, a digital currency issued and available alongside the fiduciary euro would provide consumers with a cheap and quick alternative to other such means of payment. Such a currency would also significantly change the fiscal policy of the central bank, which in this case could inject funds directly into the circulation system to achieve its inflation targets.
Speaking of the European Central Bank, it is worth mentioning that interest rates have remained unchanged, assuming the waiting mode for market events.