A week after the European Central Bank (ECB) decided to continue its plan to create a digital version of the euro, experts voiced concerns about its future. On July 14th, the Governing Council approved the start of the “investigation phase” of the project. This phase lasts 24 months, during which important design and deployment issues need to be resolved.
Hugo Coelho – former Chief of Staff to the President of the Eurogroup, Mario Centeno
But according to Hugo Coelho, former chief of staff of Eurogroup President Mario Centeno and partner at Forefront, “the results are still unclear and it will probably take a long time”.
The Eurogroup is the informal but politically important organization of the finance ministers of the 19 EU member states that introduced the common currency. Coelho to explain:
“The digital euro is currently still undefined. The first version of a digital euro will likely look like a prepaid card and change our daily lives somewhat, but it could change gradually. “
So far it is known that the digital euro is supposed to represent the euro and the coins in electronic form. Unlike fiat money, however, it is stored directly in ECB accounts and not with commercial banks. For the ECB it is tantamount to an additional payment solution and is not intended to replace cash.
ECB loses the war on cryptocurrencies and stablecoins
Euractiv, a pan-European media network specializing in EU politics, commented that the digital euro is by default more secure than the private banking system as there is no possibility of default – a difficult situation.
“The ECB is the ultimate guarantee for everyone,” said Karl Toussaint du Wast, co-founder of Netinvestissement. In addition, the use of the CBDC should be free of charge for payments made using a card issued by the ECB or a smartphone app.
Last week, ECB President Christine Lagarde said the research phase was “encouraging results” from analysis and testing over the past nine months, which led to the “central bank’s decision to speed up and launch the digital euro project “. Toussaint du Wast described the move as “hopelessly desperate”:
“The ECB has lost. The innovation and growth power of projects developed on blockchain, including cryptocurrencies, is 10 years ahead. “
According to Euractiv, one of the main reasons for the digital euro project is that the ECB wants to retain its monetary sovereignty and will not give up. In this situation, stablecoins backed by fiat currencies such as the US dollar and the euro are the “first enemy” of the digital euro, according to Toussaint du Wast.
Apparently, the electronic embodiment of the euro is likely to come after Facebook’s “Diem” coin. Earlier this year, the ECB requested a veto against the introduction of similar stablecoins in the euro zone, citing the need to control inflation and maintain payment security within a single currency area.
According to News.Bitcoin