A CBDC could make the euro more popular beyond the EU's borders, and it should be 'regulated and properly supervised' through cooperation between jurisdictions, says ecb chief Lagarde. By iamsandali
Although Lagarde did not directly address the implications of a digital euro potentially being adopted by a country as an official currency – in the same way that El Salvador and Ecuador use the U.S. dollar – the ECB has previously addressed the risks of currency substitution associated with a digital euro when used beyond EU borders.
"Similar design features would have to be applied to the use of a digital euro by non-residents. This would stop a digital euro replacing other forms of investment and facilitating currency substitution in countries outside the euro area," Fabio Panetta, an ECB executive board member, said in a 2021 speech.
Responding to a question on why EU residents would be interested in a digital euro when digital payments are already widespread in the bloc – where cash usage is on the decline – Lagarde reiterated the ECB's stance that a central bank digital currency should be something the ECB should be ready to make available if people want it.
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