Last month, we reported that the bank was thinking about issuing a digital currency. The proposal was part of a draft that seeks to ban “high-risk” crypto projects. The ECB’s target is Libra, the global digital currency developed by Facebook, which has been repeatedly criticized by European leaders.
Now the central bank is debating the pros and cons of issuing its own digital currency that would provide holders with a direct claim on the ECB.
With a digital currency available in parallel with the euro, consumers will have a cheap and fast means of payment alternative. The move would have a significant impact on the bank’s fiscal policy. For example, the central bank will be able to inject funds directly into the economy to achieve its inflation target.
On a side note, the ECB left the interest rate unchanged, taking a wait-and-see mode.
