During a policy panel on November 12, Lagarde said the ECB is putting in the ground work to be the first central bank to actually release a CBDC, short for a central bank digital currency.
However, no further initiatives may be introduced right now until a consultation launched in October 2020 ends in January 2021. Apart from these consultations, the banks still have multiple concerns to address about the potential introduction of CBDC.
Specifically, the ECB wants to focus on anti-money laundering policies and countering the funding of terrorism, as well as boosting privacy.
Lagarde spoke against Facebook's Libra and China's digital yuan, arguing that while both tokens seemed promising, they were a great example of how a CBDC cannot be rushed.
Her words coincide with her homologue in the United States with the Federal Reserve Bank cautioning that while a CBDC is probably the best way forward, it cannot be rushed.
The panel held on November 12 was also joined by other bank chiefs, including Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey who expressed similar sentiments to Lagarde.
A CBDC can be beneficial not only to the financial sector but also to online gaming and other operations. Websites such as 1xBit, Bitcasino.io, and FortuneJack would all benefit from having a digital currency they can accept to fund consumer accounts, for example.
Debates about the adoption of CBDCs around the world are ongoing.
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