Since the end of 2019, the European Central Bank (ECB) has started to study the advisability of launching its own virtual currency . With the containment and the increase in the number of online payments, this decision makes even more sense today. Christine Lagarde, President of the ECB, explained that her institution had to first assess the issues and risks associated with the potential launch of a European cryptocurrency .
European cryptocurrency “lagging behind” against Chinese and American giants
If Europe is so interested in these new means of payment, it is also because its economic rivals are also engaged in a mad race for virtual currency. The United States and China would thus be much closer to launching their currency than the European Union. This is also the observation of Christine Lagarde, during a conference at the German Federal Bank. Where she regrets that Europe has “fallen behind” on the issue of cryptocurrency.
However, the former boss of the International Monetary Fund (IMF) explains that she prefers Europe to take its time . The launch of a virtual currency represents a major challenge. “ The Eurosystem has not yet taken a decision on the introduction of a digital euro. But, like many other central banks around the world. We are studying the benefits, risks and operational challenges of such a decision” she explains.
The example of Libra: Facebook’s half-failure
To understand these very cautious statements from Christine Lagarde, we must turn to the history of the latest cryptocurrency, Libra. This currency, announced by Facebook in 2019, was to create an international means of payment . However, faced with the possibility of letting a private group manage our money, criticism has multiplied. Thus, many countries, including France, have spoken of their reluctance to launch a cryptocurrency owned by a private group. Even the Nobel laureate in economics, Joseph Stiglitz, was invited to the debate. He had said that ” only a fool would trust Facebook for his financial well-being .”
In short, Facebook is obliged to review its model which does not please the States. The latter fear that the private group will obtain greater economic power than sovereign and democratic states.
Although the European Union is not the equivalent of a private company, the example of Facebook allows us to highlight all the challenges related to the launch of a cryptocurrency. And, in a global climate where economic rivalry is constant, there is no doubt that China and the United States will seek to impose their cryptocurrency model in Europe and internationally …