Insider Economy ECB should be 'ahead of the curve' on digital currency-Lagarde

ECB should be ‘ahead of the curve’ on digital currency-Lagarde

The European Central Bank hopes to have identified objectives for its taskforce on a digital currency by mid-2020, new ECB President Christine Lagarde said on Thursday, adding the bank should be “ahead of the curve” on the issue.

At her first news conference at the helm of the ECB, Lagarde said the bank needed to decide what it wanted to achieve with the project before moving on to the technicalities.

“Are we trying to reduce costs? Are we trying to cut out the middleman? Are we trying have inclusive finance at no cost? There is a whole range of objectives that can be pursued.”

Noting the interest shown by central banks in Canada, Britain and elsewhere, she said:

“My personal conviction is that given developments we see, not so much in bitcoin but in stablecoins projects… we’d better be ahead of the curve because there is clearly demand out there that we have to respond to.”

The ECB has been debating the pros and cons of introducing its own digital currency, which would give holders a direct claim on the central bank — just like with banknotes but without the inconvenience of storing large amounts of cash.

A digital currency would give the public a cheap and fast means of payment but would also have huge repercussions for the financial system and the central bank’s own policy.

For instance, depositors would be likely to switch into the ECB currency at times of financial turmoil, potentially exacerbating any bank run.

On the upside, such a currency would allow the ECB to inject liquidity directly into the real economy if it wants to boost inflation, bypassing the financial sector and potentially making its policy more effective.

The debate about a central bank digital currency has been simmering in the background for years but it has gained fresh momentum since Facebook unveiled plans to launch its own private digital currency, called Libra, earlier this year.

The initiative has met with resistance from regulators across major jurisdictions, worried about the implications for money laundering and consumer protection, as well as their own grip on money creation.

EU finance ministers said earlier this month that private digital currencies should not be allowed in the bloc until the risks they could pose are clearly addressed.

(Reuters)

Top Stories

CySEC fines Commerzbank AG €650,000 for market manipulation

    The Board of the Cyprus Securities and Exchange Commission (CySEC) completed its investigation regarding the compliance of the now defunct Cyprus Popular Bank (CPB)...

New espresso blends at Alphamega Hypermarkets’ cafeterias

    Alphamega Hypermarkets are investing in the coffee culture that has grown significantly in Cyprus over these past few years, making sure to offer high-quality...

582 booked for speeding, 60 for drunk driving in 3 days

    Police booked 582 drivers for speeding and another 60 for drunk driving during the three days from Friday to Sunday as part of ongoing...

3rd consecutive day of red alert for forest fires

The Forestry Department has issued yet another fire red alert on Monday, the CNA reports. In an announcement, the Department emphasised that lighting a fire...

Driver who collided with two bikers arrested for drunk driving

  A 48 year old driver involved in a road collision with two bikers in Larnaca last night is under arrest after he was found...

Taste

Cyprus sprouts with cream and prosciutto

In a big, deep frying pan, fry the prosciutto in the olive oil, on medium heat for 2 minutes. Add the onion and garlic...

Pork burger with sundried tomatoes, mozzarella and anchovies

Mix all the ingredients together with the mince in a bowl, and combine well. Divide into 4 balls and form the burgers. Warm a griddle/pan...

Sheftalies

Wash the lamb cauls with plenty of cold water and let them settle in water and vinegar for a little while. Soak the bread crumbs...

Loukaniko Pitsilias – Pitsilia Sausage

Pitsilia sausage is produced in the Pitsilia region from pork minced meat that is “cooked” ( matured) in the dry red wine of the...