Christine Lagarde, representative of the European Central Bank, said that incentives are needed to make the digital currency attractive.
The president of the European Central Bank (ECB), Christine Lagarde, informed that the institution still maintains its plans for the issuance of a Central Bank Digital Currency, with which they seek to counteract the use of cash.
Lagarde’s statements came into place during an interview conducted by the Challenges business agency, where the official said European Union residents need faster and cheaper payments, especially when talking about international remittances within the region.
The official highlighted the need for the banking entity to adopt this technology and issue its own digital currency, although some months ago it issued certain warnings about the effects of Bitcoin for the region’s economy.
European Central Bank and a new digital currency
During the interview, Lagarde supported his allegations with a report published by the International Monetary Fund last year, in which the institution assured that the average use of cash in 11 countries was decreasing by at least 1.3% annually. These changes come from demographic and social aspects, since younger people are more inclined towards the use of alternative forms of digital money.
The official said they evaluate the viability of a digital currency for the European Union, but that the biggest challenge they face is the fact of finding an incentive that motivates residents to use it. In this regard, Lagarde commented:
“The substitute instruments linked to the money of the deposits of the private banks seem equally viable. Without an additional incentive, the CBDC would be as convenient as a bank debit card and would not offer improvements for the users ”.
A more effective system
Among the properties that this new digital currency should have, Lagarde said that one of the main aspects would come hand in hand with faster payment processing, which would benefit companies that wish to boost their financial processes.
The President of the European Central Bank also stated:
“The European Central Bank’s perspectives on this issue should not discourage or displace private solutions driven by the retail payment market, which are also fast and efficient in the European zone for all types of customers.”