The euro is going digital. The ECB has already initiated the next phase of investigation for the development of a digital version of the central bank. As Bundesbank board member Balz explains, the development has also accelerated due to pressure from the private sector.
When Facebook launched the Libra project about two years ago, there was a great outcry – especially from the central banks. With its own digital currency, the platform, which is used by 1.8 billion people every day, could have rocked the global currency system practically on its own. In the end, the project did not withstand the pressure of regulators. But the stablecoin project is not off the table yet. The social media giant has already started the next attempt with Diem, a kind of “Libra-Light”. Above all, however, the group has accelerated the development of digital central bank currencies with Libra. Corresponding planning has been in full swing worldwide since then. China has already made significant progress with its DC / EP and the US has already started a number of pilot programs for a digital dollar.
A few weeks ago, the European Central Bank also gave the official go-ahead for a 24-month investigation phase for the e-euro. In what form the CBDC (Central Bank Digital Currency) will come, whether only as a wholesale solution for wholesaling and interbank transactions, or as a retail solution also for EU citizens, is still unclear. It is fairly certain that the e-euro will come sooner or later; even if the infrastructural framework is still open, as Burkhard Balz explains in the ntv podcast “So techt Germany”. The Bundesbank board member also does not consider a blockchain-based digital currency to be ruled out. The design is ultimately still open-ended and ultimately depends on “what is politically wanted”.
No “total anonymity”
However, anonymous payments do not seem to be among the politically wanted criteria. “There will be no such thing as total anonymity,” explains Balz. Industry experts like Jonas Groß from the Frankfurt School Blockchain Center are required to do just that. “The digital euro should guarantee a high degree of privacy,” the currency expert and project manager told BTC-ECHO.
Balz also admits that the ECB is probably putting pressure on the development of the euro with a view to Facebook’s crypto project. A start in Europe would have been “extremely difficult”. The currency sovereignty does not, of course, want to be given to private individuals without a fight. So Facebook probably gave the final impetus for the global CBDC arms race rather involuntarily. To what extent Diem, if the stablecoin comes, is still relevant as soon as the digital central bank currencies see the light of day is in any case questionable.