A digital euro will probably become legal tender in the euro area if the European Central Bank proceeds with launching the new form of money, Executive Board member Fabio Panetta said.
“It’s a likely outcome -- this will be examined in the next 24 months,” Panetta told a panel Tuesday in Helsinki. He cautioned, however, that achieving legal tender status “should not be taken for granted.”
Such status could potentially give the central-bank-issued digital currency an edge over other forms of electronic payments in Europe, which aren’t currently recognized as legal tender and therefore aren’t consistently available to consumers as a payment method.
If the ECB manages to make its digital euro cost-effective and guarantee its usability, that could allow for a more widespread adoption than critics of the project assume. Panetta pushed back last week against arguments that a digital euro will be “redundant” amid other alternatives, saying the central bank will ensure it’s attractive enough to incentivize its use.
Addressing the same event, Russian central bank Governor Elvira Nabiullina agreed with Panetta. “We consider that a digital currency will have this basis of legal tender -- it will be mandatory for merchants,” she said.
Nabiullina stressed the importance of “seamless conversion between forms of money,” calling it “crucial for the trust of society in this money.”
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