According to European Central Bank President Christine Lagarde, the institution is eager to expand its role in developing Central Bank Digital Currencies. Luckily for private companies, this does not mean they will not be able to join them in doing so.
During an interview with business magazine, Challenges, Lagarde confirmed that the ECB wants to participate in the space of digital currencies actively. In a time where both businesses and individuals are conducting more and more cross border payments, the demand for CBDC's is increasing, which is why the ECB is exploring the feasibility and merits of these digital currencies.
“My personal conviction is that given developments we see, not so much in bitcoin but in stablecoins projects... we’d better be ahead of the curve because there is clearly demand out there that we have to respond to.”
Previously Lagarde described the ambition of the ECB to stay ahead of the curve when it comes to CBDC's. Furthermore, the institution does not wish to stand in the way of innovation happening with cryptocurrencies outside the category of CBDC's.
An ECB taskforce was set up last month, which will cooperate with European central banks to explore the benefits, costs and risks of a possible Euro CBDC. The sudden increase of interest from government institution was sparked by Facebook's Libra, which was announced in the summer of 2019.
Although Lagarde has said cryptocurrencies could address many of the problems with the legacy financial system, she said they might also present new risks to users. Last month, she expressed concern Facebook could use its digital platform to lock out rival stablecoin operators and thereby gain an unfair advantage.