The first digital Euro report issued by the European Central Bank will start the digital currency project as soon as next year

category:Finance
 The first digital Euro report issued by the European Central Bank will start the digital currency project as soon as next year


European Central Bank President Lagarde said that European consumption, saving and investment behavior is becoming more and more digital. The ECB will ensure that people trust the euro and adapt it to the digital age.

The report said that in some countries and regions of the euro area, the phenomenon of cash as a means of payment has decreased significantly. Although young people still use a lot of cash, the trend of electronic payment is gradually rising, and many consumers expect to strengthen the relevant infrastructure construction.

At the same time, central banks around the world are actively carrying out digital currency projects. Sweden, Switzerland and other countries are in the lead in this respect. If the situation develops further, it may affect the power of the European Central Bank to control the money supply in the euro area.

This makes the ECB aware of the urgency of implementing the digital currency program. At a recent seminar, vice president of the European Central Bank, djindos, said that the issuance of digital euro has become a task it must carry out.

However, the issue of digital currency will not shake the position of cash in the euro system. In its statement, the European Central Bank also expressed its clear opposition to the motion to abolish banknotes and coins, and said that digital euro would be used as a supplement to cash rather than a substitute for cash.

In Germany, the largest economy in the euro zone, people still prefer to pay in cash. Many Germans still value cash very much because it protects privacy and doesnt have to rely on any technical infrastructure to pay, said Deutsche Bank President weidmann

At present, there are still disputes among the relevant stakeholders in the euro area on how to issue digital euro in the future. The ECB said that the issuance of digital euro in the future should follow the following five principles.

First, digital euro is only another way to supply euro, not a parallel currency, it should be convertible with other forms of euro; second, digital euro will be different from other assets, not to mention encryption assets and stable currency, the number of digital currencies issued by the ECB should always be under the full control of the euro system; third, in all euro area countries, digital euro should be converted into other forms of euro; second, digital euro will be different from other assets, not encryption assets and stable currency Fourth, in the field of retail payments, even if the ECB plans to issue digital euro, it should not restrict private solutions from trying in this area; fifthly, the digital euro must be trusted like any other form of euro.

The report said that in addition to the above benefits, the issuance of digital currency also needs to consider the potential adverse effects. In addition to common issues such as privacy and security, the ECB said it also needs to consider three major issues that may lead to losses in the banking sector, the stability of monetary policy and financial system in the euro area, and the use of digital euro as another form of investment.

The first challenge for the ECB is to ensure that the European commercial banking system does not suffer losses as a result of people transferring deposits to the central bank. Issuing digital currency will increase the financing cost of banks. It may cause depositors to convert commercial bank deposits into central bank debt, which will increase the financing cost, increase the interest rate of bank loans and reduce the amount of bank credit to the economy.

If this demand increases the cost of bank financing, banks may have to deleverage and reduce the supply of credit, thereby preventing the optimal level of total investment and consumption, the ECB said. If this process means higher costs for borrowers, then economic activity may be hindered.

The ECB said it was not desirable for the digital euro to attract large investment inflows. But it also needs to be carefully regulated. If the value of the digital Euro held by the public is too low, the digital euro will not be so attractive as a means of payment. At the macro level, Ms Lagarde also said that the intensification of global protectionism could bring another risk to the issuance of digital currency. Many payment service providers in Europe are from abroad, and the increase of protectionist policies may lead to the interruption of payment process. All of these considerations will have a direct impact on the design of the digital euro, the report said. The European Central Bank will launch a public consultation on October 12 to listen to the opinions of the public, scholars, financial institutions and public sectors on the digital euro project to assess the demand. Relevant internal tests will also be carried out simultaneously. According to the website of the European Union Intellectual Property Office, the European central bank registered the digital euro as a trademark at the end of September, indicating that the European Central Bank has taken a historic step towards the issuance of digital currency. The last financing feast on the eve of red line? Real estate companies issued a record amount of bonds in the third quarter SMIC International: some suppliers are further restricted by US export control regulations Urumqi: overdue housing provident fund loans can be relaxed to December 31_ NF5619

The ECB said it was not desirable for the digital euro to attract large investment inflows. But it also needs to be carefully regulated. If the value of the digital Euro held by the public is too low, the digital euro will not be so attractive as a means of payment.

At the macro level, Ms Lagarde also said that the intensification of global protectionism could bring another risk to the issuance of digital currency. Many payment service providers in Europe are from abroad, and the increase of protectionist policies may lead to the interruption of payment process.

All of these considerations will have a direct impact on the design of the digital euro, the report said. The European Central Bank will launch a public consultation on October 12 to listen to the opinions of the public, scholars, financial institutions and public sectors on the digital euro project to assess the demand. Relevant internal tests will also be carried out simultaneously.

According to the website of the European Union Intellectual Property Office, the European central bank registered the digital euro as a trademark at the end of September, indicating that the European Central Bank has taken a historic step towards the issuance of digital currency.