German finance minister calls for quick decisions on ECB's digital currency

Germany's finance minister, Olaf Scholz, said that Europeans should work very hard to come up with a solution for digital payments, as there is a massive demand for digital money from consumers and businesses.

Speaking on a joint news conference with Chancellor Angela Merkel after a virtual G20 summit meeting, Scholz said that he believes the authorities should act up fast to decide on the concept of the digital euro.

On the digital euro, I think we should work very hard. It is nothing where we should wait and see. We should be able to decide at any time that now we should do something with a digital euro.

The world's largest central banks, including the European Central Bank, are considering how their own digital currencies could play a role in simplifying domestic and international payments.

Bundesbank sees it differently

The member of the Executive Board of the Deutsche Bundesbank, Burkhard Balz, recently stated that the digital euro was potentially dangerous. He noted that CBDC (central bank digital currency) might have negative and, in most cases, unpredictable consequences for the financial system. 

Particularly, he pointed out the risks of "digital bank run" in crisis times that will lead to rapid deposit withdrawals and kill the banking system.

Canadian and Russian regulators voiced similar concerns, while the boss of Japan's biggest financial group disagrees, voicing that a digital yen would be a significant boost for the Japanese economy.

China leads the world with CBDC adoption

Meanwhile, China believes that the advantages of having a state-backed digital currency outweigh the risks. The country has launched the second test program with digital yuan in the city of Suzhou. The authorities will distribute 10 million tokens among the citizens via lottery. Users will be able to spend online and in a number of brick-and-mortar shopping outlets.