December 4, 2019 / 4:19 PM / 10 days ago

ECB needs to move fast on "e-euro" digital currency - French central banker

PARIS, Dec 4 (Reuters) - The European Central Bank needs to move quickly if Europe is to steal a march on other regions by issuing the first central bank digital currency, France’s central bank head said on Wednesday.

Some countries such as the United States and European nations are looking at creating central bank digital currencies, or CBDCs, but so far China is the most advanced towards making its own digitised money.

“There would be some advantage in moving rapidly to issue at least a wholesale CBDC, as we would be the first such issuer in the world and would thus reap the benefits of having a benchmark CBDC,” Bank of France Governor Francois Villeroy de Galhau told a finance conference in Paris.

The French central bank is eager to get experiments running that would use a CBDC for exchanging and settling tokenised financial assets between financial companies, Villeroy said.

The Bank of France is to launch a call for projects before the end of the first quarter of 2020.

“Our actions will naturally contribute to the work of the Eurosystem (of European central banks), which should make looking into the possibility of an ‘e-euro’ one of its next focuses,” he added.

Central banks and governments have been spurred into action over concerns about the rise of cryptocurrencies such as Facebook’s Libra, which they fear could erode state control over money.

Meanwhile, the emergence of contactless debit cards has made it easier for consumers and businesses to use electronic cash, or e-money, to pay for goods and services.

While China also leads in this area with Alipay and WeChat Pay, the payments market in the euro zone remains largely fragmented along national lines despite a shared currency.

Some European banks are working on a Pan-European Payment Solution Initiative, or PEPSI, which Villeroy said would be a “major step forward” that could help banks withstand pressure from big tech firms moving into the payments market. (Reporting by Leigh Thomas; Editing by Hugh Lawson)

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