Speaking at the 2023 BIS Innovation Summit today, European Central Bank (ECB) president Christine Lagarde outlined the motivations behind the development of a digital euro. As in previous occasions, the issue of monetary sovereignty played a leading role as Europe hopes to reduce its dependence on foreign international payments systems.
Starting with resilience, Ms. Lagarde highlighted the need to avoid repeating the same mistakes as with Russian energy dependence and instead safeguard European payment autonomy by developing its own central bank digital currency (CBDC). “As we have experienced recently with other instruments that are of critical use, such as energy, it is very unhealthy to rely on one single source,” the president said.
Ms. Lagarde also noted that current means of payment “are not necessarily European, so we just have to be careful,” probably referring to the likes of US-based Visa and Mastercard, which process two-thirds of European card payments, as well as Paypal and other digital payment platforms.
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