Yves Mersch, member of the executive board of the European Central Bank, said during CoinDesk's Consensus 2020 conference the central bank is working on a "retail central bank digital currency."
According to him, the ECB has a task force working on the project, which is focused on the development of a retail CBDC.
Mersch says that the vast majority of transactions in the eurozone - about 76% - are conducted in cash, which is the reason why "the ECB’s debate on CBDCs is therefore mainly analytical."
However, he states that even though a CBDC is not currently necessary, this is not a sufficient reason for the ECB not to continue working on the study and development of its own digital currency in order to be ready if it eventually needs to issue it.
Mersch thinks the bank's priority now is to develop a retail rather than a wholesale CBDC, as "a wholesale CBDC, restricted to a limited group of financial counterparties, would be largely business as usual. However, a retail CBDC, accessible to all, would be a game changer. So a retail CBDC is now our main focus."
This type of currency could be "based on digital tokens, which would circulate in a decentralized manner – that is without a central ledger – and allow for anonymity towards the central bank, similar to cash."
The Bank for International Settlements (BIS) published in January a report that revealed that a large number of central banks around the world are working on their own digital currencies. However, according to the BIS, most of these initiatives are still in the early stages of development.
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