An 'e-euro' is currently being studied and set to be launched soon according to the governor of the French central bank. This digital currency would enable countries to strengthen their position in the face of competition from private initiatives such as Libra, developed by Facebook.
Pixabay / xuuxuu
The Banque de France is set to launch testing next year to develop a "digital central bank currency" dedicated to "wholesale" (i.e. very large) transactions, according to an announcement made on Wednesday 11 December by the governor of France’s central bank, François Villeroy de Galhau.
The governor intends for testing to begin "very quickly" and will be launching a tender for projects by the end of the first quarter of 2020, he said at a conference in Paris. This initiative by the French central bank will be a first in the eurozone, and the institution is hoping in time to develop what it calls a "digital euro" – a currency which would be dealt using technology along the lines of blockchain.
Maintain sovereignty in the face of tech giants like Facebook
Villeroy de Galhau explained that the experiment by the French central bank would form part of "study into an eventual 'e-euro'" supported by the Eurosystem – a subject brought up on Monday 9 December at the European Parliament by new European Central Bank president Christine Lagarde. A digital central bank currency on a European level would provide "significant leverage to reaffirm our sovereignty in the face of private initiatives such as Libra", he added.
Last June, Facebook incurred the wrath of a number of governments around the world when it announced its intentional to launch its own crypto-currency in 2020 that would be tied to a basket of currencies. Since then, the social media giant has had to lowers its sights due to the reticence of various authorities and regulators, most notably in the USA, and after partner companies pulled out of the project.
As well as Facebook, the USA’s largest bank in terms of assets, JPMorgan, announced last February that it would be launching JPM Coin, tied to the US dollar and reserved for institutional investors. According to Villeroy de Galhau, a virtual European currency would provide "increased efficiency", reduce "intermediation costs" and also make it possible to "exchange sums for legal tender".
Cover image : Pixabay / martaposemuckel
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