Financial authorities in Europe could have one Research plan to create a digital euro from next yearAccording to an executive of the European Central Bank.
Holger Neuhaus, Head of the Market Integration and Innovation Department at the ECB, participated in the Singapore FinTech Festival 2020 December 7th Discuss the global evolution of Central Bank Digital Currencies (CBDCs).
During the discussion Neuhaus said the ECB expects the European financial authorities to look into whether they will start a digital euro project in mid-2021::
“In mid-2021, the euro system will consider introducing a digital euro project. But just to emphasize it would be a research phase, not the decision that has yet to be implemented. Basically, it would allow us to go into more detail […] really a plan, and what could a digital euro be like, what could it look like, how could it be implemented if and when a political decision is made. “
Neuhaus emphasized that a digital euro is complementary and not a substitute for cash or deposits from central banks in wholesale.. He noticed that too Central bank digital money poses major challenges when it comes to deploying CBDCs overseasespecially with regard to cash flow management and the issue of relative remuneration.
“That’s where it gets difficult, and that’s where we stay to think about how we can limit it, with strict limits, either with incentive systems or whatever.”Suggested Neuhaus.
Regarding CBDCs in Europe, Neuhaus pointed to the ECB’s public consultation on a possible digital euro. Published in mid-October 2020, The aim of the consultation is to gather feedback from public and private stakeholders to assess whether Europe needs a digital euro.
In November 2020 the President of the ECB, Christine Lagarde asked the bank to make a decision on the introduction of a digital euro in January 2021.