The European Central Bank is willing to expand its functionalities in developing central bank digital currencies and private enterprises are allowed to join the party if they are willing. The bank wants to enquire the merits and demerits of cryptocurrency as a vast number of cross-borders payments are done every single moment.
The bank actually does not want to be the obstacle in the way of cryptocurrencies created outside its sphere. President Christine Lagarde, who is a French politician and lawyer serving as President of the European Central Bank, told that the prospect of central bank initiatives should neither discourage nor crowd out private market-led solutions for fast and efficient retail payments in the euro area. With an eye to comprehending the benefits and costs of a possible eurozone CBDC or Central bank digital currencies, which may have great impact for the bloc’s financial sector, the European central bank constituted a cryptocurrency task force previous month.
It is expected that private initiatives can take market share prior to the government currency launched. Interest in CBDC from the world appeared after the disclosure of Facebook’s Libra in last summer. Reportedly, CBDCs can make sure a means of exchange in tandem with private crypto initiatives. Comments from central bankers on the relationship between CBDCs, cryptocurrencies and fiat currencies are coming. Their comments are saying the relationship exclusive and adversarial.
Some are paying comments in favor of multi-fiat-backed CBDC and some are opposition of this like some are saying CBDC could replace the U.S. dollar as the dominant global reserve currency on the contrary to that some are arguing that cryptocurrencies along with CBDCs are in deficit of key infrastructure and global acceptance to successfully handle the greenback. May be cryptocurreny will mitigate the risk of users. It is expected that the initiative would take the cryptocurrency sector a vast way forward as the initiative has been taken by European central bank.