Since China announced that it would be launching a digital currency (digital yuan) before 2022, many countries have continued tout around the idea of a Central Bank Digital Currency (CBDC). However, despite the United States (U.S) being the world power and expected to be leading other nations into a new monetary system believed by China to change the world, they appear not to be excited by the idea of a CBDC.
Alternatively, European Central Bank (ECB)- the European body tasked with adequately ensuring monetary policies in Europe, has previously hinted that it will consult countries under its watch and have now released a report of their consultations.
ECB believes that citizens want the CBDC because of its privacy features
According to the European governing body’s official report, they have reportedly received a record 8,300 responses
from their public consultation regarding the CBDC. The majority of the responses have come from Germany, Italy, and France, as it appears that the European countries are one of the few who are bemused about the idea.
Another exciting aspect of the consultation featured around 50% of people who preferred the CBDC, choosing it because of the level of privacy it will bring. Many of the citizens who also partook in the survey expressed their optimism behind the idea of a CBDC, as they believe it will enable them cross-pay across many nations.
According to the CBDC, they believe that many citizens find the idea of the CBDC fascinating, either because of the incredible amount of privacy it seems to come with or because the currency will prioritize the ability to pay across the eurozone.
The ECB believes that many of the citizens would prefer if the currency offer some levels of privacy, despite the consequence of that being that it will limit its feature. Alternatively, the ECB feels that should the CBDC launch in Europe, it will not be able to receive updated features as privacy restrictions will limit it.
ECB will launch a CBDC if Europeans want it
The ECB consultation panel, which started last October, is supposed to provide the European body with adequate feedback on the citizens’ expectations concerning the digital currency. Speaking to the press last month, ECB’s President- Christine Lagarde, believes that the idea behind a CBDC is a welcoming one, but the complexity affiliated with it will make it difficult for it to see the light of the day before 2025.
However, she has not ruled out the idea yet, as she believes that if it meets Europeans’ needs, the ECB will have no choice but to look towards it. China has continued to lead the race of becoming the first country to launch the CBDC, and many analysts believe that, should that happen, the country will be leading the race of being the world global power.
The Chinese regulatory body believes that the launch of a CBDC will help the nation curb financial crimes like money laundering, drug trafficking, and frauds, which the nation’s authorities believe are being perpetuated by fiat currencies and cryptocurrencies. However, while there is no official launch date for the Chinese CBDC, the country is still testing, hoping to launch the digital yuan soon.