European Central Bank President Christine Lagarde outright mentioned that the bank will consider launching a central bank digital currency (CBDC).
The ECB will be releasing the analysis it conducted after over 8,000 responses in a public consultation process on the matter. The decision on whether or not the bank will launch a CBDC could be made in the upcoming months.
This would not mean that the euro as it operates today will cease to exist. On the contrary, Lagarde clearly stated that cash would continue to be available.
She added, “We need to make sure that we’re not going to break any system, but to enhance the system.”
Lagarde mentioned that although the decision on whether to produce a CBDC or not could be made this year. The timetable for actual production would be far different, however. If the decision to launch the currency gets greenlit, it would likely take at least four years until the launch.
Lagarde directly stated,
“The whole process – let’s be realistic about it — will in my view take another four years, maybe a little more.”
The ECB will send the analysis to the European parliament. From there, it will be passed back to the ECB’s governing council. This whole process in itself could take up to about a year. That’s why Lagarde estimates a CBDC timetable of about four years without going into major details.
Watching the Sand Dollar Closely
Another thing that Lagarde mentioned is that she will be watching the rollout of the Bahamas’ Sand Dollar currency unfold.
The Sand Dollar is a digital currency, but not a decentralized currency. The Central Bank of the Bahamas still controls the number of digital coins that are going to be issued.
The fact that Lagarde will be keeping a close eye on this CBDC does not necessarily mean that type of digital currency could be expected from the ECB.
Sand Dollars are meant to be kept in central bank-approved e-wallets that should have the potential to be used offline. This is an aspect that the ECB could be keeping very much in mind. Particularly if the goal is to launch a CBDC
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