ECB Says Cash ‘Not Fit’ for Digital Economy, Dismisses CBDC Privacy Concerns
In the digital economy, cash is no longer a useful tool, and a central bank digital currency (CBDC) is the “only solution” to continue the existing monetary system, according to a new paper from the European Central Bank (ECB).
The eurozone’s central bank recently published a paper titled “The Economics of Central Bank Digital Currency,” in which the authors assessed the implications for the financial system and examined data privacy and digital payments.
A CBDC, such as a digital euro, would be the “only solution” to facilitate a “smooth continuation” of the present monetary system, the researchers concluded. Amid debate that CBDCs would limit the credit supply and be a disruptive force in financial markets, the paper rejects those concerns as unfounded….