The global race to create a central bank digital currency has been heating up after China’s latest plan of creating its version of a “crypto-yuan”. The European Union has been catching up fast, with some members of the banking community whispering about their openness to a digital euro. As Christine Lagarde takes the helm at the European Central Bank (ECB), potential changes could bring a new impact to not just the financial world, but the crypto space too. Can we expect a digital euro in Lagarde’s era? What does that mean for the broader crypto market?
Door to Digital
Central bank digital currency or CBDC is the latest hype among central bankers. With China set to become the first major economy to digitalize its currency, although the timeline remains largely unknown, more details of the project are being revealed. At the same time, China’s ambitions in blockchain seem like a wakeup call for many central bankers to rethink the notion of digitalizing currency, and the opportunities it can bring. The European Central Bank could be the next major policy-setting body to make a move.
In November 2019, Christine Lagarde was appointed by the European Council as the new president of the ECB. Lagarde is expected to deliver a major shakeup to the central bank. Financial Times reports that the reform plans range from holding regular votes on monetary policy to requiring that the president does not pre-announce policy plans. Nevertheless, these proposals could potentially bring widespread changes in terms of market interpretation of future policy meetings. With a new leader in place, it could also open the door for some deeper makeovers and blockchain technology could be one of them.
Lagarde is one of the few key monetary policymakers who is open to digital currency.