While there has been some form of misconceptions about digital currencies, they cannot be confused with cryptocurrencies or digital assets. Digital currencies are legal tenders backed by a nation’s Central bank, while cryptocurrencies are non-regulated Blockchain assets without a stable value. However, the Digital Yuan’s proposed launch by China’s Central Bank is believed to be propelling many nations globally to ponder around the idea of a digital currency. Unfortunately, the European Central Bank president- Christine Lagarde believes that the launch of such an innovative currency in Europe is far from being realistic.
Lagarde believes the complexity behind a CBDC is high
The European Central Bank’s President, in her speech to the press, confirmed that the body is touting around the idea of a digital currency. She believes that such innovation is the right step in the right direction while also confirming that a decision about whether it should start creating a digital currency will be made in the next few months. However, while Lagarde is optimistic about the project, she is uncertain about when it will finally see the light of the day.
The ECB boss believes that, should the body agree on launching a CBDC, the digital currency might not be released until 2025. Lagarde believes that such innovation’s complexity and structure will likely be the reason it will take that long before it gets to the market. Lagarde believes that many countries in the world are currently debating and proposing the launch of digital currencies, and Europe should not be left behind. However, while they are still at their proposal stage, the ECB boss confirms that there is no rush yet, neither is there any deadline for now. Lagarde has always been a firm admirer of digital currency. In her speech months ago, the ECB boss believes that the launch of such a currency will give citizens a feeling of security and safety.
China’s CBDC first, others follow
While the comments of Lagarde have come at a time when China is set to launch a CBDC, there is a general feeling that the Asian nation is ahead of others. The idea behind a CBDC in China started last year, as the lawmakers in the country believe that the proposed digital yuan will help the country curb financial crimes like money laundering, drug trafficking, etc., which is hard to trace when financed with decentralized digital assets.
The Asian country began to test the CBDC in cities like Shenzhen, Suzhou, and Chengdu. On the contrary, U.S Central Bank, via Jerome Powell, confirmed that they are not touting the idea of a CBDC at the moment. However, these situations’ implications only further show that China will likely be the first to launch the digital currency, as others will have to follow.