A digital euro has a key role to play in safeguarding European payment autonomy, according to European Central Bank President Christine Lagarde.
(Bloomberg) — A digital euro has a key role to play in safeguarding European payment autonomy, according to European Central Bank President Christine Lagarde.
She warned that it’s very unhealthy to rely on a single source for critical aspects of daily life. This was highlighted by Russia’s decision to weaponize energy supply following its invasion of Ukraine.
“When you look at your wallet and you look at your telephone and see the applications that you use for payments or the cards that you use for payment, you very soon realize that those means of payments are not necessarily European,” she told a virtual panel on central-bank digital currencies hosted by the Bank for International Settlements.
“So we just have to be careful,” she added. “Some people will call it sovereign autonomy, I prefer to call it resilience because that’s really what it is.”
The European Commission, the EU’s executive arm, has said it will make proposals for a legal framework for a digital euro by the end of June. A final decision on whether to go ahead with it will come later.
Lagarde told the panel the general trend is for less use of cash and more digital payments.
“It is intended to be safe, it is intended to be sovereign and it is intended to be available to all, anywhere, any time and at the cheapest possible cost, possibly at no cost, for the most basic functions,” she said.
Still, she acknowledged that a digital euro can’t provide the same level of privacy as bank notes.
“A digital currency will never be as anonymous as cash,” she said. “Which is why cash will always be around.”
The discussion was recorded on March 12 and broadcast on Tuesday, the BIS said.
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