Digital Fiat Currencies are Coming, With the ECB Taking the Next Step for the Digital Euro
Cryptocurrencies began to emerge around a decade ago, with Bitcoin being the digital coin pioneer, followed by LITECOIN and ETHEREUM. Now thousands of cryptocurrencies exist, as everyone seems to be issuing their own cryptocurrency. At the moment, cryptos are bearish, after the retreat in May and June, following China’s declaration of war on cryptocurrencies, when the government banned BITCOIN mining. Other countries/governments/banks are now also taking a shot at the crypto market.
The UK and Japan are picking on to the Binance exchange, banning it, while the US Securities and Exchange Commission SEC has opened a legal battle against RIPPLE XRP. So, the establishment is against the crypto market, but not across the board, I might add. The establishment supports IOTA, for the Internet of Things (IoT) micro payments.
Central banks are also coming up with their own cryptocurrencies, backed by fiat currencies. The Bahamas, China and Sweden are already testing the viability of central bank digital currencies (CBDC). Policymakers in the US are taking notice too, as they are also pushing forward with the digital dollar.
The Digital Currency Initiative at the Massachusetts Institute of Technology (MIT) is working with the Boston FED on research to jump-start the hypothetical monetary shift, in an experiment coined Project Hamilton. The Boston FED president has also said that a future “FEDcoin” would be a mix of the Venmo and Apple Pay features.
China is also progressing on this front, with the People’s Bank of China testing a digital version of its currency across the country, but saying, at the same time, that it is for domestic use. The United Kingdom is the latest country to consider launching a digital currency, with the Britcoin on the way.
The ECB is Moving Towards the Digital Euro
The European Central Bank (ECB) has launched an investigation phase for a digital Euro project. This phase will last up to 24 months, and it aims to address key issues regarding design and distribution of a digital euro. ECB president Lagarde made some remarks about the Euro coin:
It has been nine months since we published our report on a digital euro. In that time, we have carried out further analysis, sought input from citizens and professionals, and conducted some experiments, with encouraging results. All of this has led us to decide to move up a gear and start the digital euro project.
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