Is the ECB Considering Launching its Own Digital Currency? - Forex News by FX Leaders
Digital currency

Is the ECB Considering Launching its Own Digital Currency?

Posted Thursday, December 5, 2019 by
Arslan Butt • 1 min read

According to a confidential document, the ECB could consider launching a digital currency in case payments become more expensive and in a bid to lower cash usage by consumers. There is renewed interest in a pan-European digital currency following Facebook’s announcement of Libra earlier this year.

According to a Reuters report, the document states, “If industry efforts fall short of developing an innovative and efficient pan-European payment solution, the social need for it could potentially be met by issuing a central bank digital currency.”

This proposal is due for discussion later today among finance ministers from EU nations and there are hopes that it could pave the way towards exploring the possibility of a European digital currency initiative. Such a public cryptocurrency backed by the ECB offers a safer and more secure alternative to Facebook Libra and other private cryptocurrencies.

Digital currencies vastly reduce transaction costs and times and could be a more efficient way for users to make digital payments across the world. However, the paper also cautions that such a move by the ECB could have implications for monetary policy, banking industry, and the overall financial system.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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