The European Central Bank could soon launch its own digital currency, with Germany and France ready to support the project. The news, if confirmed, would be a real coup in the global cryptocurrency scenario, considering that, under Mario Draghi, the Frankfurt institute has always said it was against, or at least skeptical, these currencies. Now, with Christine Lagarde’s new presidency things could radically change. The prospect was put forward by another French banker, Benoit Couré, a member of the ECB’s governing council who declared in Helsinki that “we need to intensify the reflection on a digital currency of the central bank”, defining the announcement given by Facebook on the introduction of its Libra currency “an alarm clock”.
The consequences on the international payment system would obviously be enormous. In the case of introduction of the digital version, in fact, the euro would no longer be represented by banknotes but by electronic instruments, deposited directly at the headquarters of the central bank, without going through the credit institutions, with a disruptive impact also on the activity of banks which, as can be expected, would immediately raise huge barricades.
The digital euro, sponsorised by Paris and Berlin, would not only have a practical goal but also a strategic one, to counter the launch of Libra, which would be a private competitor, but also the introduction of the digital Yuan by the People Bank of China, the Chinese central bank, and of the national digital currency by the Swedish central bank. These two monetary authorities, in particular, currently have a competitive advantage. An advantage that the ECB intends to fill, so as not to be caught unprepared. The use of digital euro would also serve to limit the use of cash in circulation in the eurozone, with a consequent reduction in the risk of evasion, which is particularly high in Southern Europe countries.On the British side, the governor of the Bank of England Mark Carney, completely revising his traditional critical position on cryptocurrencies, stated that it is time to create a network of digital currencies issued by central banks. A strategy that would make it possible to reduce the weight of the dollar as a reserve currency in international trade. Certainly, the rush of central banks to issue digital currencies cannot fail to have effects also on the world of private digital currencies. However, it is still early to say if this leads to their strengthening or weakening.