A key official at the European Central Bank (ECB) has said the forthcoming central bank digital currency (CBDC) tests at the ECB do not guarantee the eventual launch of a digital euro, in a statement which will dampen rampant speculation around the bank’s proposals.
Advisor to the Market Infrastructure and Payments arm at the ECB, Jürgen Schaaf, said the test phase was very much a trial for the technology, and that the bank would experiment with the digital currency during this period to determine whether to eventually roll out its CBDC more widely.
“This is still not a decision to introduce or issue a digital euro. After these phases, we will have to assess properly whether the potential benefits outweigh the possible disadvantages and then take a profound decision,” Schaaf said.
The comment comes as China presses ahead with its own plans for a digital currency, with multiple regional tests already proven successful in deploying the digital currency in retail settings. According to reports, as many as 80 countries are now reported to be exploring a central bank digital currency of their own, accounting for over 95% of global GDP.
ECB President Christine Lagarde previously said Europe had fallen behind in the global race towards digital currencies and payments. However, Schaaf said it was important to take the time to make sure the technology and its implementation were done properly.
“Money and [the] provision of money is something you don’t play with. We cannot do huge scale experiments that rock the whole society and system. So whatever we’re going to provide, if we provide it, has to be really sound and safe,” Schaaf said.
Schaaf said the upcoming trials would focus on the digital euro for retail payments, noting, “We see this digital Europe project as provision of a retail payment instrument…The current setup is more focused on retail that’s embedded in the mandate.”
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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