• The European Central Bank has declared that digital currencies will be considered legal tender

  • Central Bank Digital Currencies (CBDCs) developed by foreign institutions are likely to become legal tender in the eurozone.

    Fabio Panetta, a member of the European Central Bank’s board of directors, confirmed the likelihood of this outcome on Tuesday in Helsinki. Foreign CBDCs will be treated as any other foreign currency once legal tender status is granted.

    Elvira Nabiullina of the Russian Central Bank has also expressed her views on the importance of proper conversion of various forms of money, which will have a direct impact on trust in digital assets.

    The acceptance of digital forms of payment by central banks is an important step toward assuaging consumers’ current concerns. Furthermore, if CBDCs issued by foreign banks become a part of the traditional economic system, regulated stablecoins may be recognized as legal payment tools in various countries.

    Panetta has stated that the European Central Bank cannot simply ignore or disregard illegal currencies issued by countries’ official central banks. In the next two years, the ECB will begin the process of examining central bank digital currencies.

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