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Quick Take

• The Governing Council of the European Central Bank (ECB) recently met to discuss the latest monetary policy updates for the eurozone. 
• During the subsequent press conference, ECB President, Christine Lagarde was asked a question about the digital euro, specifically why the digital euro is good for citizens of the European Union (EU)? 
• The Block Research breaks down Lagarde’s response by highlighting the key takeaways. Further, we provide additional context using publicly available information related to the digital euro initiative.

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The Reserve Bank of India (RBI), the country’s central bank, has said that it is exploring the need for digital currency.

In a booklet on payment systems published Monday, the RBI said if there is a need for a digital rupee, it will explore how to operationalize it.

“Private digital currencies (PDCs) / virtual currencies (VCs) / crypto currencies (CCs) have gained popularity in recent years. In India, the regulators and governments have been skeptical about these currencies and are apprehensive about the associated risks. Nevertheless, RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalize it,” the central bank said.

This is not the first time the RBI has commented on researching and exploring digital currencies. In 2018, the central bank said it had formed an inter-departmental group to study and provide guidance on the “desirability and feasibility” of introducing a central bank digital currency (CBDC) in order to reduce printing costs of banknotes and other benefits.

In December 2019, RBI governor Shaktikanta Das said it is “too early” to talk about a CBDC due to technological barriers. “As and when the technology evolves with adequate safeguards, I think it is an area where the Reserve Bank will certainly look at seriously at an appropriate time,” he said at the time.

Das also commented on cryptocurrencies at the time, saying that the RBI is “very clearly against” those since issuing currency is a sovereign function.

In Monday’s booklet, the RBI said digital payments are rapidly rising in India through mobile phones and cards. But in remote areas, where there is no or slow internet, it will explore an option of offline payments. “Entities are being encouraged to develop offline payment solutions, and a pilot scheme in this regard was rolled out in August 2020. The pilot scheme is being undertaken till March 31, 2021 and based on experience gained, a decision will be taken on roll out of the scheme,” the RBI said.

In all, the RBI is not opposed to the idea of digital currency, but it is also not in a rush to issue one. Meanwhile, India’s neighbor China is nearing the launch of digital yuan after researching and developing it for the past six years.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Janet Yellen will serve as the next Secretary of the Treasury Department following a vote Monday evening in the U.S. Senate.

At press time, the ongoing vote shows Yellen with 76 votes in favor to 12 against — more than enough to secure confirmation.

Yellen, who previously served as chairwoman of the U.S. Federal Reserve, cleared a key Senate committee on Friday, as previously reported, setting up the final confirmation vote. The first woman to lead the U.S. central bank, she is the first person to be appointed to lead the Treasury Department.

The now-confirmed Treasury Secretary takes over a federal department focused on a range of issues, including the economic fallout of the COVID-19 pandemic. 

Yellen will also play a role in oversight of the U.S.-based cryptocurrency industry. Focus points include a proposed — and currently frozen — tightening of AML/KYC rules for crypto wallets, as well as the implementation of rules for exchanges put forward by FATF.

During her prepared Senate remarks, Yellen offered a take on cryptocurrencies that recognize both potential benefits as well as risks. 

“Bitcoin and other digital and cryptocurrencies are providing financial transactions around the globe. Like many technological developments, this offers potential benefits for the U.S. and our allies,” she wrote. “At the same time, it also presents opportunities for states and non-state actors looking to circumvent the current financial system and undermine American interests.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.