My money

BETA VERSION – The European Central Bank wants to launch the first tests of a digital euro in a few months. A stable cryptocurrency, but limited in its uses, while China and others have already taken the plunge.

This time, it’s decided, Europe will have its sovereign cryptocurrency. No need to reinvent the wheel, what the ECB is planning is to offer a 100% digital equivalent of the euro, interchangeable with the currency we already know. Objective displayed: to follow the user in his daily uses.

Europeans are increasingly turning to digital in their consumption, savings and investment patterns “, explains Christine Lagarde, President of the ECB. “Our role is to preserve confidence in the currency. This means ensuring that the euro is fit for the digital age. We must be prepared to issue a digital euro if it becomes necessary. “

Resist Bitcoin, Libr, and currency intrusions from other states

In a report released in recent days, ECB experts list scenarios that could lead to more massive public demand for digital currency trading. Among them, the constant decline in cash exchanges, but also the possibility of seeing other private or state actors impose themselves as creators of a currency of exchange on a daily basis.

Last year, when Facebook announced the upcoming launch of Libra, a stable cryptocurrency, at prices based on that of major currencies, most of the world’s central banks reacted negatively, to a private player trying to beat currency, despite the precautions displayed by the project.

Among the main stakeholders, we are a little skeptical of the European initiative. “If they do it today, it’s because they feel the ground shaking under their feet“, explains Ouriel Ohayon, founder of Zengo, a digital wallet application for cryptocurrencies.”After Libra’s announcement, everyone went into panic mode, even more so since China launched its sovereign cryptocurrency, the DCEP, in several major cities.

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The ECB’s promise is that, on a daily basis, using a “digital euro” will be as natural as paying with cash, or any other current payment method. Not a speculative cryptocurrency, therefore, rather a fluid medium of exchange, for making purchases or sending and receiving money on a daily basis. Advantage for the central bank: managing the money supply will be easier digitally than by printing banknotes.

On the user side, the benefit would be confidence in an already known currency, and the autonomy of a virtual wallet that would replace the bank account … if not that this is one of the things that the ECB would like to avoid, in all large-scale cases. In the central bank’s report, its experts promise that limits will be in place to prevent a massive migration of money managed by retail banks to the new cryptocurrency, the exchange of which could therefore not be anonymous. We are far from a digital equivalent of cash.

It’s not very visionary“, regrets Ouriel Ohayon, who considers that European decision-makers”live in the model of the past by trying to apply present recipes to it. We are in the 21st century, everything is international, people just want money that they can use everywhere. That it comes from a European currency is secondary, almost obsolete.

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Final decision next summer

On the other hand, the arrival of one of the major currencies in the field of cryptocurrencies would be a validation of their very principle as a bargaining chip, and a foothold for the general public.

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If it properly analyzes the urgency that pushes it to move forward, the ECB is doing so slowly. Since today, the bank has put an information site online, and a public consultation on the contours of the future currency, to launch its first full-scale tests by mid-2021.

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