European Central Bank: Central bank digital currency will be issued without efficient pan-European payment solution

The European Central Bank is considering issuing digital currencies across Europe to establish an efficient payment system.

An internal document obtained by Bloomberg on Wednesday showed that the European Central Bank believes that technological innovation is rapidly changing the way retail payments are made, including reduced cash usage. The European Central Bank is currently analyzing the situation and is prepared to respond when needed.

The document states, "If the industry is unable to develop innovative and efficient pan-European payment solutions, it is possible to meet the needs of society by issuing a central bank digital currency. A central bank digital currency with legal status can in principle guarantee that all users can use Cheap and convenient payment methods. "

The document also states that if the use of cash falls, the central bank's digital currency can also ensure that the public can still use the currency issued by the central bank. However, cash remains a popular payment method throughout the euro area. Future declines in cash use may accelerate central bank efforts in central bank digital currency.

The European Central Bank believes that the specific design of the central bank's digital currency may have a profound impact on the financial system, so it needs to be carefully evaluated. Central bank digital currencies may change the way monetary policy is implemented and passed to the real economy. It may also affect the role of banking, credit intermediation and bank financing. Therefore, the function of the central bank's digital currency and its impact on the economy and finance deserve further analysis.

On this basis, the European Central Bank will continue to analyze the central bank's digital currency with a view to exploring how new technologies can benefit the European people and can take action if necessary in the future. However, the central bank will not prevent or exclude solutions that are dominated by private markets to enable fast payments in the euro area.

Author Xiu MU