2021 IN DiGITAL EURO

2021 IN DiGITAL EURO

By MISSSUAREZ | SS-News & Experiences | 26 Dec 2020


We are at a peculiar moment in the history of money, one in which the nation-states that competed with conventional currencies begin to digitize them, in order to make their monetary policy more effective in some cases, or to make borders between countries are increasingly blurred for the same in others.

The maturation and institutional adoption of Bitcoin, as well as the appearance of new digital currencies issued by business groups such as Diem (formerly Lira) opens up a new horizon of possibilities in which governments, companies and open source communities compete for offering the best solution in this new monetary environment, given the limited options we previously had as citizens.

With the arrival of stablecoins and specifically the digital euro, the traditional role of banks could be displaced, the introduction of open banking models in an environment of low rates, and could see the funds custody service being disintermediated, with the possibility of citizens having a wallet guarded by the ECB or by themselves, apart from commercial banking, something that would imply a radical change in the rules of the game.

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The coronavirus pandemic has turned our lives upside down in all aspects and has made us acquire completely new habits. One of them is to almost banish the use of physical money to reduce the risk of contagion and at the same time increase the use of cards and mobile phones to make all kinds of payments.

One consequence of all this may be the advance in the arrival of the digital euro, the new currency that the European Union is studying to launch on the market in the future.

But, what's exactly digital Euro €? 

Against the another cryptocurrencies it was born physical not digital.

The digital euro will be equivalent to the physical euro, but logically it can only be used in digital environments. The ECB has announced that for every digital euro issued, one physical euro will be withdrawn from circulation. Currently, cash is part of the monetary base of each State and current electronic money, for example, credit or debit cards, is part of the money supply, that is, it is money that has been created by commercial and cash-related banks.

Citizens will be able to open accounts directly at the ECB, without having to go through traditional intermediaries (commercial banks).

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The idea is that digital euro will become popular among the population to make small payments, although it is designed to make it legal to pay any type of amount. Ultimately, it will not differ too much from the physical euro.

In fact, it's a stable coin,but in my opinion the most important thing in the cryptocurrencies market it's the movement of the value. You buy in a low price and sell in the highest, if not, what's funny?

What do you think about?

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MISSSUAREZ
MISSSUAREZ

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