ECB anticipates clarity on digital euro by summer

The European Central Bank (ECB) is not relenting from its pursuit of a digital euro currency, in a bid to boost financial transparency.

However, the bank may still only allow digital deposits worth around €3,000. According to ECB executive member Fabio Panetta that would be enough to cover most people's cash needs, while the bulk of all financial operations will still be focused through the digital currency.

The ECB doesn't plan on taking on commercial banks but rather to offer its own dedicated product with the added benefit of a “digital option.”

Commenting on stability, Panetta explained that the digital euro would not infringe on the existing banking system or jeopardize the financial system as we know it.

“We will discourage large holdings of digital euro. If banks do in fact lose deposits, then we can make more liquidity available to them”, he said.

The ECB is coming out of a consultation period during which it requested feedback from the public and specialists as to how the central bank should proceed with the roll-out of a digital currency. Some 8,000 parties have responded.

Despite interest, the ECB is nowhere near expediting the time frame. ECB president Christine Lagarde has been pushing for a much quicker adoption rate, but other executives have been wary of the potential dangers of rushing into the unknown.

According to Panetta, a more likely time-frame for bringing clarity to the issue is mid-2021. While the European Central Bank is certainly ahead of the US in terms of adopting a digital crypto currency, it's still behind China, where the e-yuan is already gathering momentum.

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Written by Barney


Barney is co-founder of When not at work he can usually be found behind a Nikon. He's won numerous international competitions for his photography and volunteers as a content creator for aid organisations in Africa.

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