Speaking before the Franco-German Parliamentary Assembly on Monday (Sept. 21), European Central Bank (ECB) President Christine Lagarde made a case for the digital euro, saying it would provide an alternative to private digital currencies, according to her prepared opening remarks.
She framed the need for change as the need to adapt to the new digital world.
“We need to fully reap the potential gains from digital technologies and, at the same time, make sure labor markets remain inclusive,” she said, according to the remarks. “If we don’t, we risk creating a new divide, and we can already see gaps opening up when we look at differences in wages, education levels and gender.”
She said part of that will come from ensuring the strength and autonomy of the region’s payment systems. A digital euro, she said, could “be a complement to, not a substitute for, cash; it could provide an alternative to private digital currencies and ensure that sovereign money remains at the core of European payment systems.”
In addition, Lagarde said European governments need to work together on changes to labor, product and financial market regulations and implement education to make sure no one is digitally left behind. That can be done through more progress toward the Digital Single Market, she said, to help implement economies of scale for digital firms, while also bolstering cybersecurity and data protection.
The idea of an official digital coin has been touted by several countries and companies worldwide as of late, particularly as the pandemic moves the world in a more digital direction. Giesecke+Devrient Chairman and Group CEO Ralf Wintergast recently came out in support of Lagarde’s initiatives toward digital currencies. He called for “much faster action” at the European level and said it had to happen before it is “too late.”
However, despite the newly mainstream status for digital coins, regulators still want to see cryptocurrencies, including stablecoins, heavily policed, PYMNTS reported. The finance ministers of Germany, France, Italy, Spain and the Netherlands asked the ECB to prohibit stablecoins until oversight concerns are met.