Central banks should investigate risks and benefits of digital currencies

Central banks should consider issuing digital currencies.
The new form of money is a result of evolving consumer behavior.

A central bank-issued digital currency could ensure that citizens have access to central bank money even if they chose to reduce or stop using cash, a member of ECB's governing council said in his recent speech in Brussel devoted to the European strategy of retail payments of tomorrow.

He believes that new technologies influence the payment behavior of European citizens and change their spending patterns, A reduced use of cash is one of the most obvious examples of the evolving reality.

He suggested that the central bank should consider issuing proprietary digital money to ensure monetary stability amid diminishing usage of cash.

Digital currency of this sort could take a variety of forms, the benefits and costs of which the ECB and other central banks are currently investigating, being mindful of their broader consequences on financial intermediation, he said.

He also called on EU countries to consolidate their efforts to maintain and develop a single market and create a pan-European market solution.

At the same time, Benoit Coeure emphasized that regulators should not impede the development of private market solutions for quick and efficient payments in the eurozone.

Notably, last year, he said that Bitcoin was an evil spawn of the financial crisis.

He will head the innovation hub at the Bank for International Settlements as of January 15, 2020.

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