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ECB exec says consideration phase for digital euro to go well into 2021

According to an executive at the European Central Bank, financial authorities in Europe could form an investigation plan for a digital euro as soon as next year.

According to cointelegraph, Holger Neuhaus, head of market innovation and integration division at the ECB, joined the Singapore FinTech Festival 2020 on Dec. 07 in order to discuss the global development of central bank digital currencies (CBDCs).

During the online discussion, Neuhaus stated:

“In mid-2021, the Euro system will consider whether to launch a digital euro project. But just to highlight, it would be an investigation phase, not the decision yet to implement. It would basically allow us to come up […] with actually a plan, and what could be a digital euro, how could it look like, how could it be implemented, if and when a policy decision is taken.”

Neuhaus emphasized that a digital euro would complement, not substitute cash or wholesale central bank deposits. He also mentioned that central bank digital money poses big challenges when it comes to CBDC use abroad, specially related to capital flow management and the relative remuneration question.

“That’s where it becomes difficult and that’s where we were left to think of how to limit it, with hard limits, whether with incentive schemes or whatever,” Neuhaus indicated.

Concerning CBDCs in Europe, Neuhaus said the ECB’s public consultation on a potential digital euro. Released in mid-October 2020, the consultation plans to collect feedback from public and private stakeholders to evaluate whether Europe needs a digital euro.

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