European Central Bank Forges Ahead With A Digital Currency

A digital currency backed by the European Central Bank (ECB) could be in use by next year, officials involved in its development have confirmed.

The European public digital currency is aimed at competing against social media giant Facebook, which announced in June its blueprint for Libra, a private digital currency and other private sector projects. The European Union (EU) thinks that a digital currency could also help to reduce the costs of international transactions, which they consider to be too high.

Regarding the new digital currency, French Finance Minister Bruno Le Maire told a news conference in Brussels: "The fact that it is for the long term does not prevent us from working and having results next year."

The ECB is reportedly already working on the technical aspects of a digital currency and would present its conclusions to European Union governments soon. EU finance ministers are set to adopt in December a joint statement welcoming the ECB’s work on the topic of a digital currency.

Several options are apparently being studied. Under the most ambitious plan, users of a new digital coin could open bank accounts directly at the ECB. That would cut transaction costs but would make existing banks and payment services largely redundant. Under a less radical approach, banks could be given electronic cash or tokens by the ECB that they could then distribute to their clients.