Digital euro: ECB tests public opinion with new digital currency survey

European Central Bank (ECB) head announces public survey into ‘digital euro’.

• ECB President Christine Lagarde announced a public survey on a proposed ‘digital euro’.
• Survey comes after a report evaluating the merits of a ‘digital euro’.
• China has already launched its own ‘digital yuan’.

ECB President Christine Lagarde announced a public survey on a proposed ‘digital euro’.

This suggests that any digital currency issued by the central bank could be made public, rather than just made for inter-bank transactions.

This retail central bank digital currency (CBDC), could drastically alter retail finance, paving the way for a truly cashless Eurozone.

Explaining the bank’s reasoning for the survey, Lagarde said the survey will allow the bank to find out whether Europeans “would be happy to use a digital euro just in the way they use a euro coin or a euro banknote knowing that it is central bank money that is available and that they can rely upon.”

The survey comes after the ECB published a report evaluating the merits of a fully digitised euro, citing a number of benefits for financial integration across the Eurozone.

The study provided some concept of what a ‘digital euro’ might look like. Firstly, it would be fully convertible with other forms of euro (i.e., bank deposits, notes, and reserves). Secondly, it would be Eurozone-wide. Thirdly, it would not seek to compete with private solutions, possibly hinting at some sort of legal mandate.

CBDCs are growing in popularity on the word-stage. China’s ‘digital yuan’ bears a striking resemblance to the ECB’s digital euro proposal and has already been made available for public use in selected provinces.

In the commercial world, Facebook is seeking to compete with state backed and centrally controlled CBDCs with the launch of Libra, a decentralised ‘stablecoin’, despite its rocky history.

With this new public opinion survey, the ECB might be trying to send a signal to the world that it wants to be at the forefront of this financial innovation. A ‘digital euro’ may be closer than we think.