FRANKFURT, Germany—The European Central Bank (ECB) is considering launching its own cryptocurrency if the private sector fails to create an efficient solution for cross-border payments, and if cash usage drops, according to a new paper published by the ECB.
The continent currently has an ECB-backed project for real-time payments, known as TIPS, but it has so far been met with caution by commercial banks, Crypto Globe noted.
Cash itself remains a popular means of payment in Europe, but the document notes that “signs of a future decline in cash usage could be a catalyst in accelerating central bank efforts in the area of central bank digital currency.” The ECB has been focusing more on digital currencies after social media giant Facebook announced it’s looking to launch its own cryptocurrency, Libra.
The ECB’s document, which set to be discussed by EU finance ministers, reads: “If industry efforts fall short of developing an innovative and efficient pan-European payment solution, the social need for it could potentially be met by issuing a central bank digital currency,” Crypto Globe noted.
Bank of France Test
Separately, the Bank of France plans to start testing digital currency in 2020, according to a new report.
Bank of France Governor François Villeroy de Galhau said the decision was made amid growing concerns among governments over new currencies planned by Facebook and others.
Villeroy de Galhau said the central bank wants to start running experiments rapidly and will launch a call for projects before the end of the first quarter of 2020. According to Villeroy de Galhau, France is interested in promoting innovation in the central bank digital currency industry. However, he emphasized that the technologies should be approached seriously and methodically, FXStreet reported.
The pilot project will involve only financial institutions.
It means that the digital coin will not be available for retail payments made by retail customers as they would "be subject to special vigilance," Villeroy de Galhau added.