ECB President Lagarde: Hopes to assess whether central bank digital currencies can serve the public and support ECB goals

Author: Liang CHE

Source: Tweet

European Central Bank President Christine Lagarde said he wanted to assess whether the central bank's digital currency can serve the public and support the ECB's goals.

Lagarde attended the European Parliament's annual report hearing on Tuesday afternoon, and her statement at the hearing was posted on the European Central Bank's official website.

In her speech, she highlighted two issues: the role of monetary policy in the current economic environment and the structural challenges facing the euro area economy.

She said that since early 2018, growth in the euro zone has been slowing down, mainly due to global uncertainty and weak international trade. In this context, the European Central Bank supports the recovery of countries' economies through four major measures: negative policy interest rates, asset purchases, forward guidance and targeted lending operations, so as to protect the euro area economy from global adverse factors.

But she pointed out that monetary policy should not be the only means, because the longer the easing measures are taken, the greater the risk of side effects. Because the low interest rate environment will affect savings income, asset valuations and house prices. The European Central Bank is closely monitoring possible negative effects.

She also mentioned that digitization is a global phenomenon. They will not wait for us to prepare. Whether we are ready or not, they will affect us. We need to do our best to prepare. The European Central Bank is therefore assessing the potential and impact of technological developments on payment services and financial stability, and is also actively contributing to this innovation.

To this end, the European Central Bank set up a working group in January to investigate the opportunities and challenges related to the different potential designs of central bank digital currencies and to test how they work in practice, especially to assess whether central bank digital currencies can serve the public And support the goals of the European Central Bank. The European Central Bank will work with five other central banks and the Bank for International Settlements to share experience in this area and assess the potential cross-border use of this digital currency.

She also mentioned that the architecture of the euro area has undergone significant changes in recent years, but the basic elements are still missing or incomplete, which hinders its ability to realize its full potential for euro area citizens. This is why the European Central Bank has always advocated and will continue to provide reasons for a more complete European Monetary Union.

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