Financial regime in Europe could form an investigation plan for a digital euro as early as next yr, according to an executive at the European Central Depository financial institution.

Holger Neuhaus, caput of market place innovation and integration at the ECB, joined the Singapore FinTech Festival 2020 on Monday to discuss the global development of key bank digital currencies, or CBDCs.

During the online give-and-take, Neuhaus claimed that the ECB expects European financial authorities to assess whether to launch a digital euro initiative past mid-2021:

"In mid-2021, the euro system will consider whether to launch a digital euro project. Merely but to highlight, it would exist an investigation phase, not the decision notwithstanding to implement. It would basically allow u.s.a. to come up [...] with really a plan, and what could exist a digital euro, how could it look like, how could it be implemented, if and when a policy decision is taken."

Neuhaus stressed that a digital euro would complement, non substitute cash or wholesale fundamental bank deposits. He also noted that fundamental bank digital money poses big challenges when it comes to CBDC use abroad, particularly related to capital letter flow management and the relative remuneration question.

"That'south where information technology becomes difficult, and that'due south where we were left to call back of how to limit it — with difficult limits, whether with incentive schemes or whatever," Neuhaus suggested.

Regarding CBDCs in Europe, Neuhaus noted the ECB's public consultation on a potential digital euro. Released in mid-October, the consultation intends to collect feedback from public and private stakeholders to evaluate whether Europe needs a digital euro.

In November, ECB president Christine Lagarde urged the depository financial institution to come upwards with a decision on releasing a digital euro in January 2021.