Reading time: ~1 m
The European Central Bank (ECB) said that the transition to a state digital currency will reduce risks to the financial system.
According to a working paper aimed at identifying problems and reaching consensus on a state cryptocurrency (CBDC), the introduction of a digital currency by the Central Bank appears to be the “only solution” that guarantees a “smooth continuation” of the current monetary system.
“The introduction of CBDC is the only solution to guarantee a smooth continuation of the current monetary system, as physical money loses its economic suitability, and cryptocurrencies of large digital platforms continue to fill the market,” the document says.
The ECB noted that interest in the “economics of money and payments” has increased dramatically over the past 15 years and has gone beyond a narrow academic circle. Therefore, society needs to provide such a tool as the digital currency of the Central Bank, while solving all the problems of confidentiality.
“While consumers in surveys place great importance on privacy, in practice they tend to give away their data for free or in exchange for a very small reward,” the statement said.
The authors define privacy as an area that requires additional research, as well as the preferences of end users for the development of functions of digital currencies of the Central Bank. The document also rejects fears that the digital currencies of the Central Bank can lead to a reduction in the credit supply.
Earlier this month, The main European financial regulator compared the digital currencies of the Central Bank with bitcoin, saying that the calculations in the latter are too complicated and costly.
#ECB #sees #state #digital #currency #alternative #money