Not everyone is pleased with bitcoin, but now the European Central Bank (ECB) - which described bitcoin as the “evil” spawn of 2008’s financial crisis - says it’s on the verge of doing something about it.
The ECB and Its Digital Plans
What is this plan? To develop a new centralized cryptocurrency issued by the bank. This isn’t much of a plan when you really think about it considering just how many countries and governments say they’re looking to exact the same steps. China, for example, recently passed a law that would allow it to create a digitized version of the yuan, while the Fed in the United States says that it’s also considering plans to develop a new cryptocurrency.
The bottom line is that all these institutions are terrified of things like Libra, the new cryptocurrency project being issued by Facebook. Libra has garnered mixed reviews from both the public and politicians since it was first announced last June. Many of them claim that the currency could potentially open the doors to several white-collar crimes including money laundering. This is a valid fear, though to be fair, the social media conglomerate has sworn it will cooperate with regulators.
Head honcho Mark Zuckerberg has even stated that Facebook will have no choice but to exit the Libra Association granted the project cannot attain full regulatory approval.
Nevertheless, many are still worried about what it can do to the financial space, and are looking to take measures against it, but some are just concerned about the prospects of cryptocurrency in general. One such party is the ECB, which doesn’t seem too convinced that bitcoin has much of a place in the world’s financial playing field.
Benoit Coeure is an executive board member of the bank. In a recent interview, he described the bank’s plans for a digital currency and why he thinks these plans could do far more for European citizens:
A central bank digital currency could ensure that citizens remain able to use central bank money even if cash is eventually no longer used. A digital currency of this sort could take a variety of forms, the benefits and costs of which the ECB and other central banks are currently investigating.
We Want to Fix Over-the-Border Payments
One of the big problems he sees with present financial systems is their lack of cross-border payment action. He’s concerned with how long payments take and how difficult it is to ensure currencies can be exchanged or crossed. He’s confident an ECB-issued cryptocurrency could fix this:
The currency situation has attracted new initiatives that aim to overcome shortcomings in cross-border retail payments by building a new separate payments ecosystem. These initiatives highlight the rapidly rising consumer demand for payment services that work across borders and that are also faster, cheaper and easier to use.