The digitization of traditional currencies like the euro has the potential to increase their international appeal, the European Central Bank says in a new report. A failure to offer a digital currency would endanger financial stability, ECB warns. The regulator is concerned about the prospect of tech giants dominating payments through their “artificial currencies.”
Eurozone’s Central Bank Reviews Role of Euro in Light of CBDC Project
The global appeal of fiat currencies depends on economic fundamentals, but some characteristics of digital money could promote their adoption beyond the issuing jurisdiction, the European Central Bank (ECB) has noted in a recent review of the international role of the euro. Specific design features can also incentivize non-residents to use a digital euro as a means of payment, unit of account and store of value, the regulator says.
Safety is a key feature, the bank points out, as a central bank digital currency (CBDC) would be a claim on the balance