On the 29th of October 2021, Ms. Christine Lagarde, the President of the European Central Bank (ECB), sent a letter to MEP Gunnar Beck (ID,Germany) on a digital euro. A digital euro would be something completely different compared to crypto-assets for the following reasons:
– People using it could have the same level of confidence as with cash, since, like cash, a digital euro would also be backed by a central bank;
– As a direct claim on the central bank, a digital euro would be free of liquidity, credit and market risk;
– By allowing people to pay digitally with central bank money, they would have an additional choice for their daily payment needs which could be used throughout the euro area;
– It would be available as a complement to cash and commercial bank money, not as a replacement for them. As a result, a digital euro could ensure the continued availability of central bank money and preserve its role as an anchor of stability for the financial system;
– A digital euro would help deal with situations in which people no longer prefer using cash and it would also avoid dependence on digital means of payment issued and controlled from outside the euro area, which might undermine financial stability and monetary sovereignty. A digital euro would combine the efficiency of a digital payment instrument with the safety of, and trust in, central bank money, and bring the benefits of the euro for Europeans into the digital age.