Joachim Nagel from the European Central Bank has warned of the limitations of central banks’ current models and strongly supported the rise of central bank digital currency adoption.
CBDC projects and their adoption have been the spotlight of the crypto industry for a few years. Global central banks are running their research projects, aiming to launch their central bank digital currencies (CBDCs). The subject of digital currency adoption also rose at a Bank for International Settlements Summit on May 6. At the event, a member of the European Central Bank, Joachim Nagel, raised the issue of revisiting central bank models.
A prominent economic daily quoted his words supporting digital currencies and their underlying technology. He put the focus on both retail and wholesale CBDC projects. According to him, digital ledger technology (DLT) was one of the ways to update central bank business models.
He stressed on how physical money was losing appeal, and DLT could help tackle the issue. Francois Villeroy de Galhau, another member of the ECB, also suggested using wholesale and retail CBDCs. He claimed that central bank money had to anchor economies stably but not necessarily be a dominant means of payment.
Further, he added, “This is why I believe that, sooner or later, we will need a central bank digital currency for wholesale as well as for retail purposes.”
The comments by these central bankers highlight the importance of the digital euro project, which is currently being researched.
While heading the digital euro project, the ECB also released a report detailing its progress earlier this year. Meanwhile, ECB members have also spoken about its importance in the past. A couple of months back, ECB member Piero Cipollone delivered a detailed speech explaining the privacy and security parameters of the digital euro.
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