The recent announcement of the ECB, according to which it is ready to create a "digital euro", although expected, has raised significant questions.
From Monday 12 October, the ECB is launching the first round of consultations on the "digital euro" and it is certain that many of these questions will be answered.
Of course, the ECB is not the first central bank to move in this direction. The Fed, the BoE and the BoJ are doing the same. The People's Bank of China has already launched a pilot operation of the "digital renbie".
The digital euro, if used, "will be complementary to the currency in circulation" on coins and banknotes.
But this "complementarity" is not yet clear. And this ambiguity raises many questions about whether the digital euro is like plastic money, or something related.
The truth is that the "digital money" prepared by central banks has a different basis than that of bitcoin or other cryptocurrencies. This difference has to do with the fact that the "digital euro" is created on the basis of the public monetary system and its value base will be a state-structured component of the system of trading goods and services. Unlike cryptocurrencies, whose "production" and value pricing is private.
According to Ms. Lagarde, confidence in money must be ensured. "That is why we must be ready to issue digital euros if the need arises." That is? That is, "the possibility of introducing a global private payment instrument that could raise regulatory concerns and pose risks to financial stability ...". The concern of losing control of money is obvious.
But there is something more. The central banks, in order to face the recession in conditions of a pandemic, have "drowned" the planet - and continue to do so - with liquidity. And "digital currencies" are not hidden ... under the mattress. The "control" of this money and the possibility of inflationary pressures is identical with their existence.
