ECB’s Panetta Says CBDCs ‘Likely’ to Be Legal Tender: Report

Central bank digital currencies (CBDCs) will probably become legal tender in the jurisdictions of their issuance, the European Central Bank’s (ECB) Fabio Panetta said.

Panetta, a member of the ECB’s executive board, said this was “likely” at a panel in Helsinki on Tuesday, according to a Bloomberg report. However, this status “should not be taken for granted,” he added.CBDCs being legal tender would give them an edge over other payment options provided by private companies and help achieve wider use by the public.“It would be quite awkward not to have legal-tender status for an additional instrument issued by a central bank,” Panetta said.A document published today outlining the ECB’s policy considerations for introducing a digital euro lists the possibility of legal tender status as one of its principal areas for investigation.Other considerations include interaction with the European retail payments market, design choices, use cases and what front and back-end technical infrastructure could best handle these issues.The ECB has been discussing a CBDC since the start of the year and said in July it was commencing an investigative phase that would last 24 months.

Read more: Digital Euro Isn’t Guaranteed After Experiment, ECB Advisor Says

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