ECB quickens the pace in the rush for digital currency
European push triggered by threat of Libra
European officials at both the national and supranational level have spoken of the accelerating development of a digital Euro (EUR).
According to Reuters, the European Central Bank (ECB) the central bank of the euro zone is already working on the technicalities of a digital currency and will present its plans to European Union (EU) governments in the near future.
Only a few years ago governments and central banks were dismissive of digital currencies, this sentiment has changed however thanks to the announcement of Libra. When Facebook announced its plans to develop and launch a digital currency nation states became defensively interested in the idea.
If it comes into existence, the Libra stable coin will provide an alternative method of exchange to state printed currencies, facilitating cross-border payments and immediately available to Facebook’s 2 billion users.
The finance ministers of France and Germany issued a joint statement following the announcement of Libra stating: “no private entity can claim monetary power, which is inherent to the sovereignty of nations” and vowed to block the currencies introduction throughout the European Union.
Bruno Le Maire, the French finance minister, hinted the week at the schedule for the launch of an ECB digital currency stating: “The fact that it is for the long term does not prevent us from working and having results next year”.
The exact nature of the ECB’s digital currency is not yet clear. At least it is thought that banks will be given electronic cash or tokens by the central bank which can then be distributed to their clients. More far reaching proposals evision users of the new digital currency being able to open bank accounts directly at the ECB, reducing transaction costs and rendering most existing banks redundant.