Central Bank, COVID-19, Crisis, digital euro, ECB, Economy, EU, Euro, Europe, European Central Bank, Luis de Guindos, pandemic, recovery, vaccination, vice president

Faced with challenges on many fronts, the European Central Bank is now deepening the analysis of how to digitalize its currency. A decision on whether to issue a digital euro, which has the potential to become a major CBDC, is expected around mid-2021, a high-ranking official of the central bank has confirmed.

Eurozone’s Central Bank to Decide on the Digital Euro Project Within Months

Occupied with planning a “cautious exit†from the social, economic and health emergency forced upon the European Union by the Covid-19 crisis, the ECB is also compelled to think about a digital version of the euro, the fiat currency of Europe’s monetary union. The U.S. Federal Reserve is preparing to present prototypes of a digital dollar in July, Facebook-backed, dollar-pegged diem is set to launch this year, and China has already offered its citizens to apply for a digital yuan wallet.

Central Bank, COVID-19, Crisis, digital euro, ECB, Economy, EU, Euro, Europe, European Central Bank, Luis de Guindos, pandemic, recovery, vaccination, vice president
Luis de Guindos, Vice President of the ECB

On this backdrop, the central bank of the Eurozone is now increasing efforts to thoroughly examine the option to issue its own digital currency, ECB Vice President Luis de Guindos revealed to the press. He also confirmed that the bank’s Governing Council will decide around mid-2021 whether to initiate a project for the launch of a digital euro. Speaking to the Italian daily La Repubblica, the official stated:

According to the English translation of the recent interview published by the ECB this week, de Guindos also noted that central banks have played a key role worldwide in dealing with the coronavirus pandemic, “and we must make sure we are also well equipped to deal with any future challenge, on all fronts.â€

‘It’s Not an Option, We Have to Do It’

In an earlier interview with Público, the former economy minister of Spain insisted that the digital euro is not a reaction to cryptocurrencies. In his words, the main reason behind it is that digitalization has become increasingly relevant and the pandemic has accelerated its pace. “For us, the digital euro is not an option, it’s something we just have to do. It’s not trivial in terms of the potential implications for financial stability and for monetary policy, so we will have to calibrate this project to minimize any potential negative consequences it could have,†emphasized Luis de Guindos.

Other problems, the solving of which is also a must for the ECB, stem from Europe’s slower recovery from the pandemic. The EU lags behind the United Kingdom, Israel, and the U.S. where vaccination accelerates and the socio-economic conditions have started to improve. The bank’s vice president describes the current situation on the Old Continent as “bittersweet.â€

Central Bank, COVID-19, Crisis, digital euro, ECB, Economy, EU, Euro, Europe, European Central Bank, Luis de Guindos, pandemic, recovery, vaccination, vice president

“The first quarter was weaker than we expected three months ago. On the other hand, the pace of vaccination is gaining momentum across Europe. This is good news, because it will have a major impact on the economy… I hope that we will be in a much better situation by early summer,†de Guindos predicted. He added that estimates now point to a growth of around 4%, based on positive expectations for the second half of the year.

The negative effects of the Covid crisis have been quite different in the individual member-states. The decline in GDP last year varied significantly, from 4 to 5% in the Nordic countries to 11% in Spain. Others, like Italy, are seeing a spike in public debt. An increase in non-performing loans is expected later this year and inflation could exceed 2%. Luis de Guindos indicated that the ECB may “start to think about phasing out the emergency mode on the monetary policy side†but he also rejected the idea of cutting public debt and the possibility of raising interest rates.

What are your thoughts on the digital euro project? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Du lịch nhật bản, hướng dẫn du lịch Nhật và đánh giá địa điểm Nhật Bản Japan travel news, japan travel guides, japan holiday destinations and japan reviews

RELATED NEWS

Bosnia and Herzegovina Is Preparing a Draft Bill to Regulate Cryptocurrencies

A European country in the Balkans region could start regulating the crypto environment within its territory. A bill is being drafted in Bosnia and Herzegovina that would establish a regulatory framework for cryptocurrencies for the first time in the country’s history. Bill Aims to ‘Attract Entrepreneurs’ to the Country According to Klix, the Union for […]

Xem chi tiết: Bosnia and Herzegovina Is Preparing a Draft Bill to Regulate Cryptocurrencies

Hungary to Cut Tax on Crypto Profits in Half, Down to 15%

The government in Budapest has put forward measures aimed at streamlining taxation and reducing the tax burden on businesses and citizens. As part of the package, Hungary plans to cut the tax levied on capital gains from cryptocurrency transactions, expecting to increase budget revenue with the move. Tax Cut to Attract Cryptocurrency Traders to Hungary […]

Xem chi tiết: Hungary to Cut Tax on Crypto Profits in Half, Down to 15%

Official Remittance Inflows to Zimbabwe Surged to $1 Billion After Covid-19 Restrictions Forced Migrants to Use Formal Channels

Cross border remittances into Zimbabwe surged to $1 billion in 2020, more than a 36% increase from the $636m that was recorded in 2019. This surge in remittances occurred despite the “steep decline in economic activity in host countries, which in turn made it difficult for migrants in the diaspora to send money home.†Effects […]

Xem chi tiết: Official Remittance Inflows to Zimbabwe Surged to $1 Billion After Covid-19 Restrictions Forced Migrants to Use Formal Channels

Bank of Israel Drafts Model of a Digital Shekel

The central bank of Israel has offered a glance at what a digitalized version of the national fiat currency may look like. According to a released “draft model†of the coin, Israelis should be able to use the digital shekel in payments, even offline, and convert it to cash at any moment. The Israeli central […]

Xem chi tiết: Bank of Israel Drafts Model of a Digital Shekel

Bosnia and Herzegovina Is Preparing a Draft Bill to Regulate Cryptocurrencies

A European country in the Balkans region could start regulating the crypto environment within its territory. A bill is being drafted in Bosnia and Herzegovina that would establish a regulatory framework for cryptocurrencies for the first time in the country’s history. Bill Aims to ‘Attract Entrepreneurs’ to the Country According to Klix, the Union for […]

Xem chi tiết: Bosnia and Herzegovina Is Preparing a Draft Bill to Regulate Cryptocurrencies

Hungary to Cut Tax on Crypto Profits in Half, Down to 15%

The government in Budapest has put forward measures aimed at streamlining taxation and reducing the tax burden on businesses and citizens. As part of the package, Hungary plans to cut the tax levied on capital gains from cryptocurrency transactions, expecting to increase budget revenue with the move. Tax Cut to Attract Cryptocurrency Traders to Hungary […]

Xem chi tiết: Hungary to Cut Tax on Crypto Profits in Half, Down to 15%

Biden Economics: US Jobs Report Lackluster, Unemployment Extensions Hammer Supply Chain, Americans Want More Stimulus

Recent headlines in numerous publications claim the U.S. economy is set for rapid expansion and a “post Covid boom†thanks to Joe Biden’s economic plans. However, contradicting reports identify certain struggling elements, such as the supply chain, which have been ravaged by bureaucratic mandates, and suggest a bleaker circumstance entirely. Biden Administration Scrambles After a […]

Xem chi tiết: Biden Economics: US Jobs Report Lackluster, Unemployment Extensions Hammer Supply Chain, Americans Want More Stimulus

El Corte Ingles Files for a Crypto-Related Trademark to Provide ‘Financial Services’

El Corte Inglés, the biggest department store group in Spain, seems to be entering into the cryptocurrency sphere. After filing for a related trademark with the Intellectual Property Office of the European Union, they have registered “Bitcorâ€. Trademark Is a ‘Preventive Registration’ According to filing request #018434202, the Spanish group store seeks to offer “Finance […]

Xem chi tiết: El Corte Ingles Files for a Crypto-Related Trademark to Provide ‘Financial Services’

ECB Chief Lagarde: Cryptocurrencies Prone to Money Laundering, No Intrinsic Value, Buy if Prepared to Lose all Money

China’s Digital Yuan Smart Card to Feature Biometrics and Fingerprint Scanning

Bank of Russia Tests Services Related to Cryptocurrencies

Kazakhstan Is Preparing the Launch of a CBDC Pilot With Private Financial Companies

Fintechs Invited to Work on Georgia’s Central Bank Digital Currency

‘Gold Is Clearly Being Replaced by Digital Gold’- Precious Metal Markets Spike, Strategist Mike McGlone Calls PM Action ‘Meh’

Fintechs Invited to Work on Georgia’s Central Bank Digital Currency

‘Gold Is Clearly Being Replaced by Digital Gold’- Precious Metal Markets Spike, Strategist Mike McGlone Calls PM Action ‘Meh’