- Benoît Cœuré says fiat currencies are still important
- Fiat remains a strong means of savings
- Fiat still in-demand in Europe
Benoît Cœuré, a French economist and the head of Bank for International Settlements (BIS), has said that a Central Bank Digital Currency (CBDC) takeover does not mean an end to fiat currencies.
The BIS head reemphasized the importance of fiat currencies, stating that maintaining several payment options is the way to go rather than monopolizing CBDCs.
Cœuré comments come in the wake of countries trying to launch their own CBDC. However, Cœuré, who was also an executive board member of the European Central Bank, said amidst the looming CBDC takeover, fiat would retain its importance.
The BIS head explained that demands for fiat in the euro area is still strong. He agreed that the role cash plays as a means of settlement is declining, but they remain a strong means of saving.
He said that consumers cannot be forced to use a particular means of payment and having options helps birth innovation. Cœuré disclosed that what should be aimed at is offering choices leaving customers with the option of paying with fiats or other methods.
CBDC takeover, good or bad idea?
The BIS head, while speaking on a CBDC takeover, described innovation as a natural part of growth. Cœuré discussed how China continues to lead the CBDC race and its approach at getting done with the process immediately, comparing it to how the U.S. is handling CBDC innovation in the country.
He acknowledged that a CBDC takeover could mean an end to fiat currencies, which could be positive or negative. He said it all depends on an individual’s view. He said a CBDC launch in the U.S. being a digitally-driven economy involves banking with the Federal Reserve instead of commercial banks, based on the route the U.S. takes.
He said CBDCs are simply the digital equivalent of coins and banknotes, the safest currency issued by a public institution.
