FRANKFURT, Germany—A European Central Bank official believes digital currencies can help central banks such as his.
Vitas Vasiliauskas, a part of the Governing Council of the European Central Bank (ECB) and also a chairman of the board of Lithuania’s government bank, highlighted the benefits that central banks worldwide can have if they utilize central bank digital currencies (CBDC).
Bank of Lithuania’s chairman emphasized CBDCs are a reasonable exchange medium, payment method, and value storage for cross-border operations. Vasiliauskas stressed, however, that the CBDC space can be split into three forms of digital currencies – wholesale, retail, and a combination of both. Wholesale currencies will be eligible for financial institutions only, while the retail currencies would act as traditional central bank stocks or bonds, Crypto Browser reported.
Vasiliauskas also noted that utilizing CBDCs within European banks, the efficiency of payments would increase, and security settlements times would be lowered. The added security and transparency are also a significant benefit, he said.
‘Wonderful Method’
“CBDCs are a wonderful method of cash preservation, as the total amount of cash circulating in some countries is beginning to decline. The decline leads to a hypothetical scenario in which every person will have to open an account with equity capital to manage their daily payments. The scariest thing of all is that the circulating cash decline could exclude parts of the countries from the financial world. That is the main reason retail CBDCs will have a great future – they allow everyone to have access to central bank money and could affect positively financial stability,” Vasiliauskas added.