“No Plans for Digital Currency” – European Central Bank

On June 2018, the European Central Bank through Mr. Robert Gualtieri, The chairman of the committee on Economic and Monetary Affairs, received a letter from MEP Jonas Fernandez demanding The ECB to issue its own digital currency.

In response to the letter, while addressing the parliament, Mr. Mario Draghi, president of The European Central bank stated that The European Central Bank has “no plans to issue its own digital currency”.

“The European Central Bank is carefully looking at the possible impacts of offering digital currency as an option to banknotes. Upgrades are as yet required in the technology and innovations behind cryptocurrency forms of money before The Central Bank would think about utilizing them,” said Mr. Draghi.

He noted there was at present “no substantial need” to issue a currency within The Euro area; verbally stating high demands for cash banknotes continues to grow among the Schengen countries. Mr. Draghi acknowledged the prudent stance the 28-member bloc has typically held on bank-issued cryptocurrencies, in disparity to moves by countries such as China and Russia amongst others.

Prior this year, a joint report from The European Central Bank (ECB) and Bank for International Settlements (BIS) featured “possible effects” of a potential dispatch of such money also considering the goal for more research henceforth.

Explaining why no plans were on hand at The ECB, Mr. Draghi drew attention to a few factors limiting the decision of ECB to integrate cryptocurrency as requested by Mr. Fernandez. “Concerning the central bank regulating singular accounts for businesses and companies, this would suggest that The Central Bank would go into a rivalry for retail stores with the managing an account segment and prompt conceivably considerable operational expenses and dangers”.

The European Central Bank president said, “initiating a central bank currency could expressly yield both benefits and costs.” He continued, “in principle, a central bank digital money could meet needs for both security and digitalization of the economy.

According to Draghi, “recent situations do not indicate that there are ongoing needs to issue a central bank digital currency in the eurozone.” The ECB and The Eurosystem till now have no plans on the table to issue a central bank digital currency,” Draghi concluded.

Looking marginally further, organizations such as Nvidia have lamented a possible decrease from the event outcome. They feared that this boycott by European Central Bank will just lower their GPU deals, as the boycott will probably limit the interest of investors for cryptocurrencies. With the boycott, the best way to get the ECB to consider the request made by Mr. Fernandez is for cryptocurrency founders and regulating bodies to indulge in a grassroots investment while limiting scams and showcasing accountability would encourage currency development.

While there have been showcased rectifications in cryptocurrency world in 2018, few investors believe that the best is yet to come. There have been great deals of exercises in the market that have improved the tide.