New ECB President Christine Lagarde said the bank was studyingThe potential of the idea of releasing a digitalcurrency, which will directly provide liquidity to consumers.
At his first hearing in the European ParliamentAs head of the ECB, Lagarde spoke about the bank’s position on the idea of issuing digital currencies. Despite her positive outlook on the concept of central bank-issued cryptocurrencies, Lagarde noted that direct liquidity injections could pose a risk.
“Digital currency will allow citizens directlyuse the money of the Central Bank in its daily operations. However, depending on the architecture, the digital currency of the Central Bank may pose risks. For example, it can change the way that monetary policy is implemented and implemented in the real economy. ”
The ECB is authorized to maintain liquidity,while restraining inflation to a set level of 2%. To do this, the bank provides loans to commercial banks, and also sets the base interest rate. Outdated electronic systems are used to inject liquidity, and then the money goes to the economy and consumers through lending and other activities of commercial banks.
In addition, the Central Bank is the lender of last resort,supporting the solvency of other banks. But digital currency could be available directly to consumers, Lagarde suggested. So far, this approach to economic management has not been tested and is only a theory. It's worth noting that Lagarde avoided using the term "cryptocurrency", making a distinction between digital assets and currency.
Recently former ECB board member BenoitKöre said the bank should consider launching its own digital currency to avoid being dependent on international payment service providers. In addition, at the beginning of the month, the European Union submitted a bill proposing that the European Central Bank (ECB) consider issuing its own digital currency.
Christine Lagarde, formerly in officeManaging Director and Chairman of the International Monetary Fund (IMF), urged to explore the concept of the digital currency of the Central Bank in November last year. And in September of this year, Lagarde called for a balanced approach to cryptocurrency regulation.</p></p>