European Central Bank President Lagarde: Evaluating the Impact of Central Bank Digital Currency on European People and Economy

According to the news, the newly appointed European Central Bank President Christine Lagarde said that he was assessing the impact of the central bank's digital currency on European people and the economy.

This is the first time Lagarde has attended the European Commission hearing after taking office. She made an introductory speech to the ECON committee of the European Parliament in Brussels on Monday, and the Bank for International Settlements released the full text of her speech.

An important theme of Lagarde's speech was about "the future of money." She said that as central banks move forward in a complex and volatile situation, they should not only focus on predicting future trends, but also strive to lead the trend. But in doing so, you should pay special attention to risks and conduct a thorough analysis of risks and costs.

With the development of the financial services industry, new companies continue to enter this field, and public demand is constantly changing. The discussion around the global stablecoin some time ago is one example. Similar situations may undermine the current payment landscape and have a wider impact on the transmission of monetary policy, financial stability and the international monetary system. But the European Central Bank has not yet faced these challenges.

Lagarde mentioned TIPS, a new instant payment service system designed to address the growing demand for instant payments from users and help ensure that any bank account holder in Europe can be reached. TIPS can increase the speed and security of customers' daily transactions.

She also said that since 2016, the European Central Bank has also been exploring ways to apply distributed ledger technology to market infrastructure. The European Central Bank and the Bank of Japan have launched a research project called Stella, which is studying innovations that can promote safer, faster and cheaper financial transactions.

On the other hand, Lagarde argues that driving change means identifying and managing the risks of breakthrough innovation. Only through effective supervision and supervision to mitigate related risks can innovation such as stablecoins be beneficial. She said that it was necessary to ensure that the stablecoin would not compromise the security and efficiency of the payment system, nor would it compromise the robustness of the financial and monetary system. This is especially important for stablecoins with global influence.

In addition, Lagarde said that the European Central Bank is independently assessing the impact of central bank digital currencies on European citizens and the economy as a whole.

The central bank digital currency will allow citizens to use the central bank's currency directly in daily transactions. But she said central bank digital currencies could also pose risks. For example, they can change the way monetary policy is implemented and passed on to the real economy. They may also have an impact on the functioning and stability of the global financial system. Therefore, the issue of central bank digital currency and its optimal design is worth further analysis.

She concluded by stating that the ultimate goal of the European Central Bank is to promote more secure, innovative and integrated Euro payments. This will benefit everyone in the euro area and strengthen the influence of the euro internationally.

Image source: Pixabay

Author Liang CHE

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