ECB President: Will decide in a few months whether to launch digital euro

European Central Bank President Christine Lagarde said today that a decision on a digital euro will be made in the coming months, but the actual launch of such a currency could take years.

Lagarde told Bloomberg that the entire process of developing a central bank digital currency (CBDC) could take at least another four years, although the central bank plans to decide whether to make such a move by “mid-2021.”

CBDCs are digital versions of fiat currencies backed by central banks, and countries around the world are currently studying the benefits of developing such assets.

“But in my opinion, the whole process, let’s be realistic, will take another four years,” Lagarde said. “It may be longer, but I hope we can keep it within four years because it is both a technical effort and a fundamental change.”

She said the ECB will soon decide whether to launch a CBDC. After all, there are only three months left until the "mid-2021" target. If lawmakers approve, then work on developing the technology will begin.

“We need to make sure we get it right,” Lagarde added. “We owe it to the Europeans. They need security. They need to feel that they are holding a digital banknote backed by a central bank.”

Lagarde said last year that a digital euro was a good idea because it could complement cash and could create new jobs.

Her comments today suggest that the ECB is lagging behind other major economies. China, for example, is far ahead in the game: in October, the People's Bank of China settled more than 3 million payments using the digital yuan.

The European Central Bank and the Federal Reserve appear to be more cautious. Last month, Fed Chairman Jerome Powell said the U.S. central bank is in no rush to establish a CBDC, nor is it in a hurry to make a decision.

Lagarde reiterated today that the ECB will make a decision after analyzing public opinion on the matter.

She added: “We need to make sure we don’t undermine any systems but strengthen them.”

Lagarde, who took office as ECB president in November 2019, is not a fan of decentralized digital assets. In January, she said Bitcoin was "a highly speculative asset" that was involved in "money laundering" and must be regulated.