EU banks urged to beat digital euro amid push amid push, ECB board member says

In a recent statement, European Central Bank (ECB) board member Pio Ciplone emphasized the need for a US-led euro initiative to boost anti-bitcoins.

These cryptogrammies, driving the US dollar, are part of a broader strategy outlined by Donald Trump. Executive order Released last Thursday.

Stablecoin vs Digital Euro

Cipollone expressed concern that Trump’s focus on encouraging the development of dollar-backed stablecoins could drive customers away from traditional banks, prompting the ECB. can introduce himself Digital currency.

“The key word here in Trump’s executive order is ‘global,'” Ciplon said during Frankfurt. He noted that the push for global stablecoin adoption would end banks’ conversions, resulting in a loss of fees and customers. .

Stablecoins work in a similar way to money market funds, providing exposure to short-term interest rates in one. Fixed official currencyOften US dollars. In contrast, a digital euro would serve as an online wallet supported by the ECB but operated by financial institutions such as banks.

This digital currency will enable individuals to make payments easily, including without bank accounts. However, holdings may be limited, possibly taken to a few thousand euros, and this holding will not be of interest.

The ability to scare away liquidity from the digital euro’s cash reserves

Reuters Reports Their concerns have also been raised by banks regarding the possible impact of the digital euro on their liquidity. There is a fear that customers may transfer funds to an ECB-backed wallet, thus draining their cash reserves.

At present, the ECB A digital is experimenting with the practical functions of the euro, but the final decision about its launches depends on the approval of the relevant law by the European parliamentarians.

In a significant move, Trump’s executive order also prevents the Federal Reserve from issuing bonds Central bank digital currency (CBDC). This directive coincides with a wider trend, as Nigeria, Jamaica and the Bahamas have already launched their digital currencies.

In addition, 44 other nations are conducting pilot programs for digital currencies, according to the Atlantic Council think tank.

All around, the push for a digital euro has become relevant, especially in the context of competitive pressure from stablecoins and other digital assets in the European Union.

The ECB’s decision to push ahead with the digital euro could reshape the banking landscape in Europe, ensuring that it grows a The digital economy.