The rise of private cryptocurrencies has mobilized central banks. As of 2021, the increasing value of cryptocurrencies has accelerated the work on digital currencies (CBDC) to be issued by Central Banks. While many countries are conducting CBDC studies, the legal status and international validity of CBDCs continue to be debated.
Fabio Panetta, member of the Board of the European Central Bank, spoke today at a panel on CBDCs in Helsinki.
Stating that it is possible that the digital currencies to be issued by the countries will maintain their “legal currency” status in the euro area, Panetta stated that the opposite would be very strange.
“CBDCs are likely to retain their legal currency status in the eurozone. It would be rather strange if an additional instrument issued by a central bank did not have legal currency status.”
Stating that the ECB will review CBDCs for the next two years, Panetta also underlined that this legal status issue should not be taken lightly.
China, which is one of the countries that move fast on CBDC, continues its efforts to make the digital yuan a legal currency. Speaking in Helsinki, Bank of China Governor Yi Gang said that as long as there is a need for cash, the People’s Bank of China will not stop the supply of cash or impose administrative orders in its place.