European Central Bank (ECB) president Christine Lagarde has suggested that if the institution opts to unveil a digital Euro, it should be borderless to facilitate cross-border payments.
According to Lagarde, the borderless aspect makes it necessary for central banks globally to collaborate in coming up with the currency while stressing the need for regulations; she said during the Forum on US-European GeoEconomics on September 28.
“Digital currency is borderless, it shouldn’t be borderline, and it should certainly not cross the line, which is why it should be regulated and properly supervised. But it can facilitate cross-border payments in a big way, which is why between the United States authorities, the European authorities, and others beyond that, we need to compare notes,” Lagarde declared.
Concerns about the digital Euro
The ECB president also shelved concerns that if a digital version of the Euro is unveiled, it would not eliminate cash because most people are still attached to banknotes. She noted that those attached to bank notes are mainly concerned with the issue of privacy.
Lagarde stated concerns about the digital Euro’s privacy exist but issued an assurance that if the bank opts for the central bank digital currency (CBDC) route, protecting user information will be guaranteed. However, she pointed out that if people decide they want a digital Euro, the bank should be ready to offer one.
Notably, the ECB is among several central banks progressing with research into a CBDC to power payments. However, the bank is yet to issue any update on releasing such a currency.
More banks focusing on CBDCs
The pursuit of CBDCs by leading central banks globally has emerged as part of curbing the influence of private cryptocurrencies like Bitcoin (BTC). To this end, Lagarde has criticized cryptocurrencies at some point, suggesting they have no value.
As per a Finbold report, the ECB head suggested that the growth of cryptocurrencies can lead to the free banking era. According to Lagarde, cryptocurrencies can interfere with the role of central banks as the economy’s anchor.