European Central Bank Has ‘No Plans’ For Digital Currency As Cash Demand Grows

The European Central Bank (ECB) has “no plans” to issue its own digital currency, President Mario Draghi told the European Parliament Wednesday, September 12.

Tending to an inquiry by MEP Jonás Fernández, Draghi said “substantial development” was as yet required in the fundamental innovation behind cryptocurrencies before the Central Bank would think about utilizing them.

“The ECB and the Eurosystem currently have no plans to issue a central bank digital currency,” he outlined:

“Nonetheless, we are carefully analyzing the potential consequences of issuing such a currency as a complement to cash.”

Clarifying why no plans were in the air at the ECB, Draghi attracted attention for those same elements.

“…The technologies which could potentially be used to issue a central bank digital currency […] have not yet been thoroughly tested and require substantial further development before they could be used in a central bank context,” he told Fernández, including:

“With regard to the central bank administering individual accounts for households and companies, this would imply that the central bank would enter into competition for retail deposits with the banking sector and lead to potentially substantial operational costs and risks.”

He included there was at present “no concrete need” to issue an extra currency inside the eurozone, saying interest for cash banknotes “continues to grow” in the EU28.

Draghi proceeds with the vigilant position the 28-part coalition has traditionally hung on bank-issued cryptocurrency, rather than moves by nations, for example, Russia and China.

Prior this year, a joint report from the ECB and Bank for International Settlements (BIS) featured “side effects” of a potential launch of such a money, additionally considering the requirement for more research already.