Digital euro may have efficiency but it will not replace cash, the head of Germany's central bank, Deutsche Bundesbank, said Wednesday.
"The digital euro could thereby help lower transaction costs, make payments more efficient and spur the development of innovative services," said Jens Weidmann.
"[It] would allow people to use government-issued money to pay even if cash should, one day, no longer play such a large role in our society," he said in The Future of Cash symposium in Berlin.
Noting that a digital euro is currently being examined in the euro system, he said individuals and companies in the euro area could use the digital euro simply, securely, cheaply and fast in a digital environment.
But Weidmann said the digital euro would not replace banknotes printed by central banks.
"One thing is clear from the outset: a digital euro is intended to complement cash, not replace it. As long as the citizens of Germany want banknotes, the Bundesbank will provide them," he told.
He said risks of digitalization create fear for some individuals amid losing control, or their lives becoming too transparent.
"The digital euro won’t offer the same degree of anonymity as cash. After all, digital payments always leave a digital footprint," he said.
Weidmann also noted that public opinion on the digital euro has rapidly evolved in Germany, as one-fifth of respondents in a survey conducted by Bundesbank had heard of digital euro in the spring. That rose to one-third by September.
Central bank digital currency (CBDC) has become a hot financial topic lately with the increasing interest in cryptocurrencies and blockchain technology around the world.
A CBDC, a digital currency to be issued by a central bank, is different from a cryptocurrency since it would be backeed by a sovereign state and have an official legal tender status.
A survey from late 2020 showed that 86% of central banks are conducting research on CBDCs, and as of July 2021, 56 central banks have publicly communicated their research or development efforts, the Bank of International Settlements (BIS) said in a report on Nov. 4.
Beijing's much anticipated digital yuan, dubbed e-CNY, debuted at China International Import Expo, state-owned news agency Xinhua reported Monday.
The Bank of China set up six booths at the expo where e-CNY was used at restaurants, booths and vending machines.
China's central bank governor Yi Gang said more than 123 million personal wallets have been opened for digital yuan as of Oct. 8, with the transaction volume totaling 56 billion yuan ($8.77 billion), according to Xinhua on Wednesday.
Since the beginning of a pilot in late 2019, e-CNY has been rolled out in 10 cities, including Beijing, Shanghai and Shenzhen, while there are plans to further test it at the upcoming 2022 Beijing Winter Olympics, it added.
