(Bloomberg) — Digital currencies issued by central banks risk turning into a costly waste of time, according to the Center for European Reform.
Europe – one of the most advanced economies considering the initiative – should instead use regulation to make payments cheaper and more competitive, the London-based think tank said in a report on Tuesday. He warned that the cost benefits and privacy incentives of a so-called CBDC are unlikely to be enough to entice consumers to use it.
“Without widespread adoption, a CBDC will be a costly failure and will do little to advance central bankers’ goals,” said Zach Meyers, lead researcher. “The EU should not be distracted by the prospect of a digital euro – which may sound impressive and exciting, but may give Europeans some benefits they may not already enjoy.”
The payments initiative is being explored in around 100 countries around the world, with funders touting various benefits, from boosting financial inclusion to reducing the cost of electronic payments.
Pioneers like the Bahamas and Nigeria have already started allowing the public to use CBDCs, and European policymakers say they will ensure a future digital euro is attractive enough not to be swept away by others. private means of payment. The European Central Bank has said it could roll out its own CBDC in the coming years.
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