Europe's central bank is becoming more direct.
The important decision of the Governing Council on the digital euro is due before the summer break.
And Fabio Panetta, the responsible member of the board of directors of the central bank, promotes it emphatically: Not only as a useful digital payment option for citizens - but above all as a step to ward off crypto currencies.
The introduction of a digital euro would protect the euro zone from the threat of competing cryptocurrencies that would undermine the monetary sovereignty of the bloc, Panetta told the Financial Times.
"If people want to pay digitally and we don't offer them a digital means of payment, someone else does it." This defensive battle is even one of the main goals of the project.
Christian Siedenbiedel
Editor in business.
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The ECB is launching an attack on crypto currencies: This fits in with various steps in regulation around the world, with which digital currencies, crypto assets and different types of new money are to be more closely supervised by states and central banks.
Often it is about both: protecting consumers from risks - but also protecting central banks from disorderly competition.
"Stoke Fear of Cryptos"
Karsten Junius, chief economist at Bank Sarasin, sees two messages in the advance of the ECB digital commissioner Panetta: On the one hand, the ECB board of directors is pushing ahead in favor of the digital euro before the ECB council has made its decision. That reminds him of the former ECB President Mario Draghi, who often went public with plans early on, so that the ECB Council could only approve afterwards if it did not want to accept distortions in the financial markets. On the other hand, the ECB must also “stir up the fear of cryptos” to justify its own trade, says Junius.
Formally, a lot of the digital euro has not yet been decided, but some things are already becoming apparent. Consumers should be able to use the “digital euro” - this is the name the ECB is protecting _ on “wallets” on their smartphones. But it will probably not be a purely offline system that only exists on smartphones. There should be upper limits per wallet from which the money flows into the accounts. The banks should sell the wallets. It looks like the ECB does not prefer blockchain technology for this, but could use an existing Italian payment system for instant transfers. In any case, citizens should receive “digital central bank money” - which, like cash, directly represents a claim against the central bank. If the house bank goes bankrupt,the digital central bank money is secure and protected from access by bank creditors. The wallet can then simply be transferred to another bank.
In any case, Jörg Krämer, Commerzbank's chief economist, thinks that crypto currencies or other forms of private money are basically competition for state central banks. “Meeting this competition is probably one of several motives for the ECB to introduce a digital euro - ultimately it helps digital euro of a state central bank to maintain or increase its influence. "
The cryptocurrency defense call could also serve to dispel doubts about the practical benefits of central bank digital money and close ranks before a decision is made.
Bundesbank President Jens Weidmann has emphasized that the digital euro would make small payments cheaper, so it could be worthwhile to buy individual newspaper articles online and pay for them digitally.
On the other hand, Augustin Carstens, General Director of the Bank for International Settlements, dared to question the concept: digital central bank money may make sense for banks and companies - but not for private households.
In any case, ECB President Christine Lagarde is putting pressure on the project and has set a time frame of five years.
What does the Bundesbank board of directors think?
So will digital central bank money soon pull the plug on cryptocurrencies? Bernd Richter, specialist in payment transactions at the software provider FIS, is skeptical about this. "The digital central bank money will attack the cryptos - but they will keep their raison d'etre." The conceptions are too different: Even after the introduction of digital central bank money, there will be interest in Bitcoin & Co on the part of the market. Bundesbank board member Burkhard Balz says: "The decisive factor for the digital euro would be that it brings real added value to citizens and companies." However, courtship admits:"Our own currency is of course an essential part of our sovereignty - this is another reason why it could be important that the euro meets the requirements of the digital age." The digital euro is about common rules and uniform European standards: "That would also make our sovereignty strengthen payment transactions. "