Europe's central bank moves toward introducing digital euro

FRANKFURT, Germany (AP) — With consumers increasingly using cashless ways to buy things, the European Central Bank on Friday took a step closer to issuing a digital version of the euro currency shared by 19 countries, saying it had to be ready to launch digital money if a changing world requires it.

The central bank issued a comprehensive report outlining the reasons why it might need to take the step. The ECB also said it would hold public consultations on the idea with citizens, academics and bankers.

It said no decision has been made, and that any digital euro would complement cash, not replace it. The consultations will start Oct. 12.

“The euro belongs to Europeans and our mission is to be its guardian,” said Christine Lagarde, ECB President. “Europeans are increasingly turning to digital in the ways they spend, save and invest. Our role is to secure trust in money. This means making sure the euro is fit for the digital age. We should be prepared to issue a digital euro, should the need arise.”

A digital euro would be different from current cashless payment systems run by the private sector because it would be official central bank money - trustable, risk-free and likely less expensive to use. A central bank digital currency could also be used offline, for instance, to transfer small amounts between individuals using digital wallets on their smartphones and a Bluetooth connection.

The use of cash is dwindling in some countries, led by Sweden, where most bank branches no longer handle cash and shops, restaurants and museums accept only cards or mobile payments. Additionally, the pandemic has led to an increase in touchless, non-cash ways of paying in shops. Cash still has its adherents because it's convenient and private, and the ECB was at pains to make clear it was not proposing doing away with notes...