Christine Lagarde assures her, the ECB will not discourage private cryptocurrencies

The European Central Bank will play an active role in innovation in favor of faster and cheaper means of payment. And if Christine Lagarde wish to continue studying a central bank digital currency (CADC), the ECB will not block private initiatives.

The creation of a cryptocurrency Does it fall within the competence of the European Central Bank? European institutions, including the ECB, intend to play an active role in meeting the demand for faster and cheaper payments.

This is the answer given by its president, Christine Lagarde. It recalls that as such, the Euro-system launched in 2018 an infrastructure allowing instant payments within Europe.

The ECB does not wish to discourage private currencies

Other innovations are, however, acclaimed in the payments sector. This is the reason why the ECB will continue in 2020 its evaluation of " costs and benefits of issuing a central bank digital currency (CBDC). "

And the purpose of this digital euro is to ensure "that the general public remains able to use central bank money even if the use of physical cash ends up decreasing" underlines Christine Lagarde.

However, she adds, the central bank's cryptocurrency initiatives should not "discourage or crowd out private market solutions for fast and efficient retail payments in the eurozone." "

The feasibility of a CBDC has not yet been decided

Even if the threat Libra currently seems less significant, in particular due to political and regulatory obstacles, the ECB does not intend to bury the subject of CBDC.

"We are looking closely at the feasibility and merits of a CBDC," said its president.

And this work is particularly justified by the possible "major implications for the financial sector and for the dissemination of monetary policy". Regarding the conclusions of these reflections on digital currencies, we will still have to wait patiently.

Christine Lagarde recalls that the ECB set up an expert working group at the end of 2019 responsible for advancing closely with European central banks on the subject. And the team is still examining "the feasibility of a euro area CBDC in different forms, covering all practical aspects, including how to minimize any unintended side effects. Clearly, business to follow.