With monetary union on the horizon, the European Central Bank is looking to design a new Digital Euro (DEM) that would be more energy-efficient than Bitcoin, to help combat climate change. The central bank is looking to replace the current Euro with a Blockchain that is fully backed by physical banknotes. This would allow the central bank to better control the supply of money in an era of growing debt, and would also allow them to keep a track of it, at the same time.
The European Central Bank (ECB) announced it will study and launch a digital euro, the euro version of the euro-pegged digital currency. The move is the latest attempt to give the euro a more practical and practical digital currency. The digital currency that the ECB will start experimenting with, called the e-Euro, is a virtual currency that mimics the value of the euro, yet can be used outside the European Union. The digital euro is not expected to become an official currency as the ECB does not want it to replace the euro.
The European Central Bank, or ECB, is joining the growing club of cryptocurrency financial institutions by announcing its decision to launch a project to prepare for its eventual exit from the digital euro. The ECB’s official tweet notes:
We are examining how to develop the digital euro and distribute it to all the residents of the euro area.
According to a press release from 14. On 1 July the Governing Council started the investigation phase of the Digital Euro Project. This phase is expected to last two years. During this period the Eurogroup will develop a digital currency based on the preferences of users and the technical specifications of traders and intermediaries.
The ECB’s official statement also highlights that it has managed to find different ways to protect users’ privacy, in line with GDPR requirements. They added:
It also showed that the energy needs of the infrastructure would be negligible compared to the energy consumption and environmental footprint of crypto assets such as bitcoin (BTC).
ECB Executive Board member Fabio Panetta said the success of the digital euro will largely depend on the value it creates for people, traders and financial intermediaries in the eurozone.
Related: UAE experiments with own digital currency and launches it
In the same vein, the United Arab Emirates has also expressed interest in launching a digital version of Fiat. In a three-year plan from 2023 to 2026, the Central Bank of the UAE aims to be among the world’s ten largest financial institutions.
In 2021, banking giants around the world are announcing their interest in experimenting with different types of crypto assets. Vietnamese Prime Minister Pham Minh Chinh recently asked Vietnam’s central bank to start testing its own digital currency.
Although the cryptocurrency ecosystem is meeting with enormous resistance from the general public, governments are now concerned that they are missing out on the innovation behind it. With more and more executives looking at digital currencies, bitcoin is poised to redefine the letter B in banking.
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