How far is Europe from a sovereign digital currency

Xinhua News Agency, Beijing, October 26. "Economic Information Daily" published a report "How far is Europe from sovereign digital currency" written by Shen Zhonghao on the 26th. The abstract of the article is as follows:

The European Central Bank officially released a comprehensive report on the possible issuance of digital currency on October 2, and launched a public consultation on the digital euro on the 12th. The reason why the European Central Bank is stepping up preparations for the digital euro is that, on the one hand, the EU is promoting the digital transformation of the economy and society, and has carried out the top-level design of the digital euro as a key strategy. The sovereign digital currency will undoubtedly be a specific focus of the "European Data Strategy" announced at the beginning of this year. point.

ECB President: CBDC Can Protect Euro Dominance: Big Tech Enters Payments, European Central Bank President Chistine Lagarde Says in Video Speech Today at the Opening of the Digital Euro Conference in Brussels, Golden Finance Reports areas could increase the risk of market dominance and reliance on foreign payment technologies, thereby affecting Europe's strategic autonomy. By designing a digital public currency, we can stay ahead of these developments, ensuring that confidence in the monetary system is maintained and innovation fostered.

The ECB is currently investigating the possibility of launching a CBDC. Once the prototyping is complete and evaluated, the ECB will announce by September 2023 whether it will proceed to the implementation phase. (the block)[2022/11/8 12:30:27]

On the other hand, in the context of the accelerated deployment of digital currencies by central banks of many countries, coupled with the competitive pressure from non-sovereign digital currency projects such as Facebook’s Libra, the European Central Bank’s sense of urgency is increasing day by day.

ECB President Lagarde: ECB could launch digital currency within four years: ECB President Christine Lagarde said she hopes to complete the process of launching a digital currency in about four years. The ECB will soon publish an analysis of the 8,000 responses to the public consultation process and communicate it to the European Parliament. Based on this public consultation and the ECB's own work, the ECB's Governing Council will debate and decide in mid-2021 whether to advance a digital currency. If the Governing Council decides in favor, the process of deploying a digital currency could be completed in about four years . (Financial Associated Press) [2021/3/31 19:33:30]

Hans Peters, chairman of the German Banking Association, said that if Europe misses the opportunity for central bank digital currency innovation, its monetary sovereignty may fall into the hands of private companies or other countries.

The ECB stepped up the pace of its emergency bond purchases last week: Market news: The ECB stepped up the pace of its emergency bond purchases last week. (Golden Ten) [2021/3/9 18:29:52]

The digital euro meets the dual needs of the EU's digital transformation and the promotion of the euro's international status, but it is still in the stage of soliciting opinions and internal testing. According to the plan, the Council of the European Central Bank will decide in mid-2021 whether to launch the digital euro project.

A digital euro should be simple, risk-free, reliable and acceptable across the eurozone. By design, a digital euro must be easy to understand, easy to use, and easy to transfer. But achieving the above goals is not easy. European Central Bank executive board member Fabio Panetta said that the introduction of a digital euro must address relevant legal, technical and policy issues. Among them, the legal need to ensure that the digital euro has legal tender status, while the technical challenges are mainly related to information technology and network risks.

The public's acceptance of digital currency is crucial, and this is the key to the development of the digital euro. European society attaches great importance to data privacy, and relevant laws are becoming stricter. At the same time, the popularity and iteration speed of new digital applications in Europe is relatively slow. It may be difficult for the sovereign digital currency to be widely recognized in the euro zone countries in the short term.

At present, in the face of the new crown epidemic and the challenges of economic recovery, EU member states seem to be less interested in the digital euro. Although the strategic direction is becoming clearer, Europe is still far away from the implementation of sovereign digital currency, and frequent consultations, consultations and debates are inevitable.

Philipp Sandner, a professor at the Frankfurt School of Finance and Management, estimates that in the future the ECB will only print part of the total money supply and the other part will be issued in digital form, "but this is not expected until 2026 at the earliest."

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