The transition to the future European digital economy is based on the issuance and availability of a digital euro. In the face of the lead taken by the United States and Asia, the digital euro is a crucial issue for Europe’s competitiveness and the monetary sovereignty of the euro area.
Thanks to the opportunities of blockchain and crypto-asset technologies, the digital euro would indeed offer a wide range of new opportunities in the monetary, banking and financial sector in terms of transparency, reliability, programmability, resilience, privacy and efficiency.
The European Central Bank (ECB) is currently considering what its digital currency (CBDC) might look like within the European Monetary Union. Adan is concerned about the impact of these choices on the industry and users of crypto-assets.
Thus, if the ECB launches experiments, it is essential that this Euro CBDC includes the following characteristics:
- Citizens’ ownership and control.
- Issuance on open blockchain network(s), compatible with the requirements set by the ECB.
- Coexistence with stablecoins, due to their complementarity.
- Support on the crypto-asset sector for its deployment and the construction of the new monetary, banking and financial system.
On the other hand, if the ECB chooses not to issue its euro CBDC, Europe’s sovereignty and economic competitiveness will have to be supported by stablecoins, whose development must therefore be supported. To this end :
- Their regulatory framework must be proportionate, appropriate and conducive to innovation and competition.
- A regulatory paradigm shift needs to take place on decentralised stablecoins (and decentralised finance more broadly).
- Interoperability between different stablecoins should be encouraged to facilitate the emergence of a true currency unit.
Under either scenario, without which the digital euro will be meaningless, the EU must support the development of the crypto-currency industry as a whole. The strong competitiveness of the US on private forms of currency and the advance of Asia on their “digitised” currency is widening the gap in global currency competition. The development of private stablecoins and the opening up of competition by means of payment with the help of innovative players are an effective way of dealing with these challenges.2021-05-26-Adan-position-paper-digital-euro-CBDC-EN-1