If the European Central Bank does not start its own digital currency, it could lead to the dominance of foreign technology giants in both the European and global financial systems.
According to the European Central Bank, the international role of the euro has remained stable over the past year. While the euro has played a tiny share of global reserve currency, this can be explained by a decline in economic activity, as well as eurozone exports as a result of the coronavirus pandemic that erupted last spring.
To ensure that the current distribution of forces and the stability of the current financial system remain unchanged, central banks should complete their projects to launch their own digital currencies (CBDC). That’s what The President of the European Central Bank, Christine Lagarde, thinks. If central banks abandoned their intentions, they would clear the field for multinational tech giants that could destabilize not only the European but also the global financial system.
Lagarde sees the greatest danger in that, in fact, any technology company can start issuing its own digital currency, which could gradually emanate the role of central banks as a stabilizer not only of the financial system, but of the entire economy. The ECB is already working on a project for its CBDC and the digital euro could be launched within four years.