ROME, Jan 29 (Reuters) - The European Central Bank is exploring ways of using its instant payment platform to launch a digital euro, ECB policymaker Ignazio Visco said on Friday.
The ECB is among major central banks around the world studying digital versions of their currencies to address demand for electronic means of payment and fend off competition from private tokens such as Bitcoin and Facebook’s proposed Diem.
Visco said a digital euro, if and when it launches, could run on TIPS, the European Infrastructure for the Settlement of Instant Payments developed by the Bank of Italy to complement the ECB’s Target system.
“In conjunction with the European Central Bank, trials are also under way to explore the possibility of using TIPS as a possible technical solution for introducing a digital euro,” Visco, the governor of the Bank of Italy, said while unveiling a report on TIPS.
“TIPS could be one of the pillars for the possible implementation of a digital euro,” the report said.
Like banknotes, digital euros would give holders a direct claim on the central bank, making them safer than any deposit at a commercial bank.
ECB President Christine Lagarde said in a recent interview with Reuters she hoped a digital euro would launch within five years.
But Bundesbank President Jens Weidmann, whose native Germany is among the euro zone countries where cash use is most prevalent, has said launching a digital currency would “be an immense logistical and technical endeavour and, therefore, would be bound to take time”. (Reporting By Stefano Bernabei. Writing by Francesco Canepa in Frankfurt. Editing by Mark Potter)