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.