The European Central Bank (ECB) yesterday published a report on the international role of the euro in which the regulator says that issuing central bank digital currencies (CBDCs) is necessary to ensure financial stability.
Economists Massimo Ferrari and Arnaud Mehl claim in the report that "attention should be paid to the risks to stability that might arise if a central bank does not offer a digital currency. Issuing a CBDC would help to maintain the autonomy of domestic payment systems and the international use of a currency in a digital world."
This means that in order not to fall behind in the development of the payments industry, central banks should issue their own digital currencies.
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Other central banks are already working on their own digital currencies. For instance, the People's Bank of China has been working on its digital yuan for a while and has already tested its use cases in several regions of the country.
It is worth mentioning that the ECB report is the first time that the central bank shows such a positive stance towards a CBDC, since so far the regulator president Christine Lagarde had been pretty vague about it, saying that more research was needed.