The topic of central bank digital currencies (CBDC) came up at yesterday’s European Central Bank Forum. Christine Legarde, President of the European Central Bank (ECB), said she had a hunch that there would be a digital Euro, but it was subject to a collective decision. If there’s a positive decision next year, it will take 2-4 years to implement. Meanwhile, U.S. Federal Reserve Chair Jerome Powell noted that if a CBDC were to happen, it should not preempt the use of cash or private digital currencies. However, this may have been a slip of the tongue as he then referred to FedNow.
“The main focus is on whether and how a CBDC could improve what is already a safe, effective and dynamic domestic payments system,” said Powell and then referred to the still-strong demand for cash in the United States. “We would need this to be done in a way that does not preempt the use of cash or the use of other private digital currencies or non central bank digital currencies such as the FedNow payment service.”
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