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Bundesbank official sees need for int'l dialogue on digital currency

(Xinhua)    10:22, October 21, 2020

FRANKFURT, Oct. 20 (Xinhua) -- A comprehensive analysis and assessment of the concept of central bank digital currency (CBDC) is necessary, and in some aspects, international dialogue and close cooperation are needed, according to an official from the Deutsche Bundesbank, the German central bank.

The fact that many central banks in the world are currently analyzing CBDC "speaks in favor of international dialogue and close cooperation," said Burkhard Balz, Member of the Executive Board of the Deutsche Bundesbank. "That is also true in order to achieve quick and substantial progress in international payments," he added.

Balz made the remarks on Tuesday while addressing the China Europe Finance Summit via video link. He talked about the Eurosystem's discussion on a potential digital euro, with many questions that still remain open. The Eurosystem is the monetary authority of the eurozone.

Balz noted that the availability of CBDC to foreign citizens could come with "substantial consequences for the issuing country." It could result in a revaluation of the issuing country's currency and also for other countries, if it leads to fears that their own monetary sovereignty might be negatively impacted, he said.

"That speaks, in my point of view, in favor of close and open cooperation between the major economies in the world," said the central bank official.

He also pointed out that "it is in the interest of the global central bank community that new payment arrangements, like stable coins, with potentially global reach should only be offered if appropriately regulated and supervised."

The European Central Bank published a report on a digital euro in early October and initiated a public consultation on the topic last week. It plans to decide whether to launch a digital euro project towards mid-2021.

Balz, who participated in the high-level task force that prepared the report, said a digital euro should be analyzed and assessed relative to alternative solutions "which could help overcome existing pain points, reap the benefits of digitalization and support new payment use cases without introducing CBDC."

Financial market experts, scholars and representatives of banks and fin-tech firms from Germany and China took part in the China Europe Finance Summit, which convened in a hybrid format. The agenda covered topics such as the opening up of China's financial market, insights into cross-border investment and fin-tech innovation.

The event was organized by China Europe International Exchange, the Maleki Corporate Group and the Sino-German Center at Frankfurt School of Finance and Management.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Wen Ying, Bianji)

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