The ECB wants the CBDC to be universally accepted, and usable by those without bank accounts, the central banker said
EU Lawmakers Skeptical on Digital Euro Plans
Members of the European Parliament seem nonplussed as they are set to consider legislation for a central bank digital currency.
EU Merchants Could Be Required to Accept Digital Euro, Ministers Told
Governments from the euro currency bloc are due to discuss strategic objectives for the CBDC later Monday.
Digital Euro Should Prioritize Online, Peer-to-Peer Payments, ECB Says
Transfers in stores and to governments could take longer, but basic personal CBDC use should be free, the central bank said
EIB settles €100 million digital bond on private blockchain
“Unlike some cryptocurrencies using blockchain technology, the EIB’s blockchain bond issues do not lead to extensive energy use,” the bank wrote.
Chairman of the Digital Euro Association: ‘The primary aim of the digital euro is still not clear’
Jonas Gross spoke with Cointelegraph about the digital euro’s risks for private banks and the goals of the ECB.
Proposed digital euro designs lack privacy options, ECB presentation shows
Transactions via the EU’s prospective CBDC could be transparent to intermediaries, as any non-crypto digital transactions are.
ECB official suggests importance of physical stores accepting digital euro
Findings from the ECB’s focus groups said the public was more likely to accept a digital euro that is accepted in physical and online stores and allows easy person-to-person payments.
Central Banks of France and Switzerland announce successful trial of digital Euro, Swiss Franc
Although the project was a success, the central banks warned that significant rulebooks, contingency procedures and monitoring capabilities were needed to ensure the success of a CBDC.
European Central Bank announces digital euro advisory group members
The group consists of 30 high-ranking financial professionals from organizations, including BBVA, CRIF and Stripe, among others.
European Central Bank Moves Up Investigation Phase Of Digital Euro, How This Could Affect Crypto
President of the European Central Bank Christine Lagarde took to Twitter earlier to announce that the European Central Bank has decided to move up the investigation phase for the euro digital currency. The tweet comes in response to a tweet from the European Central Bank official Twitter handle, announcing that the institution would launch a project to prepare for the possibility of the issuance of a digital euro.
In a press release posted on the central bank’s website, the goals of the project were aligned. This included how long it expected the investigation phase to last, that the project would be designed to users’ preferences, and there had been no technical issues found in a preliminary investigation phase that the bank had carried out.
Related Reading | Bloomberg Analyst Provides Blueprint Of Bitcoin Path To $100,000
Speculations abound about how a central bank digital euro would affect the price and market of currency cryptocurrencies. But for now, the realization of this project remains in the far future as just the announced investigative phase would take over two years to complete.
Hot on the heels of this came the tweet from the president of the central bank stating that the institution had decided to get started on the investigation phase. This came only about an hour after the announcement tweet for the press release went live.
We have decided to move up a gear and start the investigation phase of the digital euro project. In the digital age people and firms should continue to have access to the safest form of money – central bank money. https://t.co/sGdxTiipsU
— Christine Lagarde (@Lagarde) July 14, 2021
What This Could Mean For Cryptos
Central bank digital currencies are not a new concept. Lots of countries have been experimenting with CBDCs after the popularity of cryptos grew to the point where governments could no longer ignore it. Citizens were going to use it whether governments wanted it or not.
With the advent of CBDCs like the digital euro, it could spell doom for some cryptocurrencies. This means that the digital euro would be backed by the European Central Bank and be tied to the actual value of its fiat counterpart.
Total crypto market cap currently at $1.33 trillion | Source: Crypto Total Market Cap on TradingView.com
This would mean that euro-backed stable coins would have to compete with the digital euro which is really just an electronic format of the euro. The more stable nature of the CBDCs means that they would be less susceptible to large price fluctuations.
Also enters the issue of using cryptocurrencies as a means of exchange and as a currency. If there are successful CBDCs in the market, then the dream of using coins like bitcoin and ethereum as currencies for daily purchases might just be farther off than forecasted.
The appeal of using cryptocurrencies as a currency comes from the fact that they are perceived as a safer option by holders. If the central bank were to bring the same utility with their coins, then cryptocurrencies might be in for a fight.
A Safer Way To Pay
So far, over 46 countries have announced that they are researching into CBDCs and are looking for a better way for their citizens to pay with their currencies. The European Central Bank has now joined the long line of central banks doing this.
CBDCs when compared to fiat money provide faster, cheaper, and more efficient payments. The digital currencies are going to be built on already existing crypto blockchain systems like bitcoin and ethereum.
Related Reading | I Stand By My $100,000 Bitcoin Price Target, Anthony Scaramucci
But while these CBDCs provide all of the above and more, it defeats the purpose of one of the biggest reasons cryptos were created in the first place; people do not want a government-controlled currency. The decentralized nature of coins like bitcoin has been one of the biggest draws of holders to them.
On the other hand, CBDCs will be under full governmental control and governments will be able to track and trace what citizens do with their currencies.
So while CBDCs might pose a formidable threat to cryptos, their centralized nature remains a big reason why investors are not excited about them.
Featured image from Forbes, chart from TradingView.com
Digital euro offers better privacy protections than private stablecoins: ECB official
Unlike private companies, the ECB has “no commercial interest” in monetizing users’ data, the ECB executive board member argued.
ECB says digital euro may be needed to combat ‘artificial currencies’
The ECB’s annual euro report stressed that a digital euro may be needed to fight off the threat of “artificial currencies” from “foreign tech giants.”
100M euro digital bond was a CBDC test, says Banque de France
European financial institutions are using pilots to make a case for the digital euro.
European Commission, ECB Unite to Consider Potential Pitfalls of the Digital Euro
The digital euro project may get underway in mid-2021 after a period of reviewing any “policy, legal and technical questions” by the two institutions.
Bank of France’s Deputy Governor Discusses CBDC Progress, Regulatory Changes
The Bank of France’s deputy governor said there has been a “hands-on approach” with the bank’s experiment to launch a digital euro for the general public.
Mass Adoption of a Digital Euro Could Be a ‘Clear Negative’ for Europe’s Banks: BofA
A Bank of America report on a possible mass-adopted digital euro noted that such movement could spell difficulty for commercial banks that could see some of their deposits migrate to the European Central Bank.
ECB’s Lagarde Has ‘Hunch’ Digital Euro Will Launch in 2-4 Years
ECB President Christine Lagarde says the impetus for a central bank digital currency could come from the need to facilitate cross-border finance.
Bank of Spain to Weigh Digital Currency Design Proposals, ‘Implications’ Through 2021
The “priority” research comes as Spain weighs a global pivot to digital economies.
Digital Euro Within Decade ‘Very Likely,’ Says Finland’s Chief Central Banker
Olli Rehn believes a digital euro “in one form or another” is all but inevitable.