Correspondent in Berlin
After what Elon musk, the owner of Tesla, has invested 1.5 billion dollars in Bitcoin this week and has announced that its electric cars can be purchased with the cryptocurrency, not only has its price increased by 17%, up to US $ 44,220, but has gained credibility and reputation, even though it is still the same open source program, not subject to regulation or supervision that it always was. By force of fact, central banks are shifting their discourse towards digital currencies and the ECB does not want to be left behind in the race to offer a product with the same benefits, but with the security and guarantees that Bitcoin lacks. And we are about to know your proposal.
The member of the Council of the ECB, Fabio Panetta has assured in a statement to the German weekly Der Spiegel that the European digital currency project It is now ready and that “launching the digital euro in different cities in a test phase would be a smart decision. In this way, it would emulate what the People’s Bank of China is doing, which already allows the digital yuan to be used in Shenzen. Panetta sets the horizon at about four or five years, until all Europeans can be using the digital euro on a day-to-day basis. Early next summer, the committee in charge will report its preliminary analysis to the Governing Council of the ECB, which will then take a decision on how to proceed and the timing. The big difference with current cryptocurrencies is that It will be safe, since the ECB will define the operational framework, the controls and the technical characteristics, a task that will take at least 18 months. Only then will the implementation phase begin.
Those who are most concerned about the launch of a digital euro are the banks, because avoids dependence on retail banking, which has been the classic financial intermediary between central banks and retail clients. Digital currencies, once acquired with legal money in progress, can be used to purchase operationsto or as investment no need for a bank account involved.
In this regard, Panetta stressed that banks “will play an important role in the distribution of the digital euro.” “We have explicitly and repeatedly stated that we want banks to be our partners, not our competitors. We are going to offer safe money, not financial services. Offering financial services is the role of commercial banks, it would be crazy for us to do it, ”the Italian tried to reassure. Also, should retail customers finally have the ability to access those digital euros directly from the ECB, the monetary authority would only allow reserves up to a certain level, or make deposits “unattractive” above a certain amount by charging interest. Panetta anticipates that the ECB is considering a limit on digital euro deposits of up to 3,000 euros in their system, something that “would be much more than the cash requirements of most people today”.
The European Commission and the ECB are working together on the launch of the digital euro. Christine Lagarde and Ursula von der Leyen keep abreast of developments and have agreed to work closely together.So far, the central bank had mainly focused on fundamentals and economics of the issues surrounding the digital euro, but in the current phase of the project it addresses the technical aspects together with the European Commission. So far, the ECB “has experimented and has not really programmed,” explains Burkhard Balz, a member of the Bundesbank’s board of directors. “In view of digitization, rapid changes in the payment traffic landscape and the emergence of crypto assets, the ECB is studying the issuance of this digital euro, not as a substitute, but as a complement to cash, and payment solutions provided by the private sector.
Following the public consultation on January 12 and a phase of preparatory work, ECB to examine whether a digital euro project should start in mid-2021, after a wide range of studies on political, legal and technical issues, taking into account their respective mandates and the independence provided for in the Treaties. Lagarde had recently said that he hopes the digital euro will arrive and that you hope will take no more than five years to come true. Balz, for his part, adds that “I share Lagarde’s assessment that five years is a realistic period until we have the digital euro.”
The Bank for International Settlements has expressed concern about whether a digital euro would bring enough benefits to consumers, but markets are already making innumerable nods to a product to which much of the wealth could soon be transferred. There are even experts who compare its safe haven value with that of gold. The intention of the ECB is to offer a safe and guaranteed product that serves as an alternative and does not derive wealth outside the financial system.