European Union Suggests Eurocoin, Mulls Banning Scam Assets
The European Central Bank (ECB) is considering adopting an official cryptocurrency.
European bureaucrats may be warming up to crypto after all. The European Union has presented some of the most lenient regulations, and has in fact created a robust system of exchanges and brokerages.
Now, the European Central Bank has signalled it may generate an official digital coin. The news, reported by Reuters, comes after years of skepticism on the side of the ECB. The central bank actually tested distributed networks and concluded that the technology was too slow for the contemporary transactional load.
The stance on digital assets is still in draft form, and comes from the Finnish EU presidency, subject to amends.
“The ECB and other EU central banks could usefully explore the opportunities as well as challenges of issuing central bank digital currencies including by considering concrete steps to this effect,” the document presented the case for digital coins.
The ECB so far has been skeptical that Bitcoin (BTC) is money, though it is still considered a legal means of payment in Germany. It is not legal tender, though, and only an elective payment channel. The ECB has also been skeptical of Facebook’s Libra, and multiple countries have expressed fears Libra could harm their monetary policy.
The draft proposal will be discussed by the EU finance ministers this Friday, and possibly face votes on December 5.
An ECB official explained that the ECB could, in theory, release electronic cash that would allow end consumers to interact directly with the central bank, without going through commercial banks. This development was subject to technological challenges and is still hypothetical.
The EU, however, may become more hawkish to the issuance of “stablecoins”, starting with Facebook’s Libra. The chief concerns are not with already issued stablecoins, but with new private currencies that may work at scale and create unwanted dollarization, or other currency risks.
Markus Ferber, a German conservative politician, believes the EU must take direct action against the issuance of digital coins.