EU working on creating digital euro
2023.01.17 11:31
EU working on creating digital euro
By Tiffany Smith
Budrigannews.com – On Monday, Governor of the Bank of England Andrew Bailey questioned the necessity of a digital pound, just as finance ministers from the euro zone supported additional preparations for a digital euro.
If a digital pound were to be launched, Britain will open a public consultation in the coming weeks on the legal features that, according to supporters, would facilitate faster transactions.
On Monday, Bailey testified before the Treasury Select Committee of Parliament that he was unsure whether a digital pound was required at this time.
“I think it’s an open question whether a wholesale digital central bank currency is needed because we’ve got a wholesale central bank money settlement system with a major upgrade,” Bailey stated. The Bank’s real-time gross settlement system (RTGS) holds the accounts of Britain’s banks, building societies, and other institutions at the BoE.
Bailey also expressed caution regarding a digital pound for use in retail, such as for payment processing, and added that there is no plan to eliminate cash.
He stated, “Before we get carried away by the technology and the idea, we have to be very clear what problem we are trying to solve here.”
He was skeptical about the claim that retail payment systems “need this kind of upgrade at the moment.”
In the meantime, finance ministers from the euro area said on Monday that they supported continuing preparations for a possible digital euro, which the European Central Bank is currently studying.
This year, the EU is scheduled to release a draft law on how a digital euro would fit into its laws.
In a joint statement, the ministers said, “The Eurogroup considers that the introduction of a digital euro as well as its main features and design choices require political decisions that should be discussed and taken at the political level.”
According to the ministers, a digital euro should complement rather than replace cash, and an “offline functionality” should be investigated to serve a wider range of uses and aid in financial inclusion.
