The president of the European Central Bank (ECB), Christine Lagarde, said on Monday that they are looking “very seriously” at the creation of a digital euro. This comes after a month in which Square decided to buy $50 million in Bitcoin (BTC) and in a period where central banks are trying to implement negative interest rates.
ECB Could Create a Digital Euro
During an event of the International Monetary Fund (IMF), the president of the ECB and former president of the IMF stated that the European Central Bank could create a digital euro. She went on saying that the pandemic that affected the entire world has changed the way in which we work and behave. This includes changes in the way economies and companies trade and how they pay.
Due to COVID-19 expansion, the number of companies working from home increased and buyers started to move towards e-commerce sites to acquire goods and services. In terms of volume and size, the e-commerce industry grew by 20% since February. In the future, this industry could continue expanding.
About a digital Euro, Christine Lagarde stated:
“A digital euro will never be a substitute for cash. It is a very good supplement and a very good partial substitute for what was being done physically.”
She went on saying that some countries such as Italy and Germany were using cash and banknotes to pay for goods and services, something that nowadays is changing due to the way in which COVID-19 works.
Nonetheless, she didn’t comment on digital currencies like Ethereum (ETH) or Bitcoin (BTC). In recent years, cryptocurrencies expanded all over the world and are being used as investment vehicles but also as a means of payment for goods and services in many regions and places all over the world.
The European Central Bank is not the first central bank thinking of issuing a digital currency. Many other banks are already moving into this direction. For example, in the United Kingdom, in Canada and in Ukraine, local central banks have shown their plans to issue a digital currency and to help their economies with the creation of these assets.
At the moment, Venezuela is the only country that implemented a blockchain-based digital asset that has reached a large part of the population. However, this digital asset is not massively used and several flaws have been reported several times.