Mario Draghi, European Central Bank President since 2011, addressed the European Parliament on the question whether the central bank will issue its own digital currency.
Mario Draghi asserts the central bank he presides upon has no existing plans to release its own cryptocurrency. He says the digital form of money is beneficial in meeting digitalization and security needs of the economy. It has a wider in scale that could straightaway reach more players. But, he continues, there are more implicit costs. And these costs outweigh the benefits.
Draghi believes that a central bank issued cryptocurrency will pit the central bank against private banking. The possibility of running into problems with regards to technology and jurisdiction is likely. Distributed Ledger Technology have not yet been scrupulously tried and tested. According to Draghi, before it can be used by the European Central Bank, the technology should mature further.
He also does not see a demand for a Euro cryptocurrency. Euro cash still holds greater and growing appeal among Europeans. The central bank president cites there are a number of available options in the Eurozone that will cater to the specific needs of its citizens. He mentioned the soon to be launched TIPS. TIPS is a TARGET instant payment system that settles payments twenty-four seven.
In contrast to the European Central Bank President’s apprehensions, some countries have publicized their intention of issuing state-run cryptocurrencies. Among the countries are Russia and Iran. Venezuela has distributed their oil-backed digital currency the El Petro since early this year.